Finance minister says economic data points to growth target hike

Finance Minister Choi Sang-mok speaks to reporters in Tbilisi on May 4, 2024, in this photo released by the Ministry of Economy and Finance. [YONHAP]

Finance Minister Choi Sang-mok has said the government is considering raising this year's economic growth target from the current 2.2 percent following a stronger-than-expected performance in the first quarter.

During a meeting held with reporters in Tbilisi on Saturday, Choi said the government is making preparations to adjust the growth target, noting that other economic institutions are likely to take similar actions.

The remark came as Korea's economy grew at the fastest pace in over two years in the first quarter of the year on the back of a continued recovery in exports and a rise in construction investment.

The country's real GDP, a key measure of economic growth, increased more strongly than predicted with a rate of 1.3 percent on quarter in the January-March period.

With the robust data, the Organization for Economic Cooperation and Development recently revised this year's growth outlook for Asia's No. 4 economy to 2.6 percent, up 0.4 percentage point from its previous estimate.

"Although it may be too early for the people to feel it, it is encouraging that indicators, including exports and domestic production, are improving," Choi said, noting that the government will nevertheless continue to stay vigilant.

Choi noted Korea is expected to achieve a GDP per capita of $40,000 during the current administration, although the country needs to continue to monitor the growth rate and foreign exchange rates.

In terms of inflation, the finance minister said the government is making efforts to stabilize it in the low to mid-2 percent range in the second half. Korea's inflation rose 2.9 percent in April on year, marking the first time in three months that the index fell below 3 percent.

Touching on the main opposition party's proposal to provide cash handouts of 250,000 won ($183) to the entire population, Choi said that the government should instead prioritize support for those in need.

Choi was visiting Georgia to participate in the 27th Asean Plus Three Finance Ministers' and Central Bank Governors' Meeting.

Yonhap