Journalist

Jang Suna and Kim Yeon-jae
  • South Korea to Expand Export Vouchers to Ease Middle East-Driven Shipping Costs
    South Korea to Expand Export Vouchers to Ease Middle East-Driven Shipping Costs The government said it will sharply expand export voucher support to help companies cope with Middle East-related shipping disruptions and rising costs. Up to 10,900 small and midsize exporters are expected to be covered by year’s end. Lim Ki-geun, vice minister of the Office of Planning and Budget, visited construction equipment maker Daemo Engineering in Siheung, Gyeonggi Province, on Monday to review the program’s progress and hear business concerns. The visit was arranged to assess how higher logistics costs and supply-chain uncertainty tied to the prolonged Middle East war are affecting companies. South Korea operates export vouchers that provide bundled support for overseas expansion, from design development to logistics and marketing, to strengthen the competitiveness of smaller firms. As geopolitical instability in the Middle East has persisted and uncertainty has grown due to higher oil prices and shipping disruptions, the government has focused on easing on-the-ground difficulties, including by creating a “Middle East-specialized emergency logistics voucher.” The export support infrastructure utilization program reviewed during the visit totals 250.2 billion won, including a supplementary budget. Demand has been strong, with about 7,050 companies applying immediately after the first recruitment notice. The government said it had executed about 80% of the 150.2 billion won in the main budget as of the end of April and plans to support up to 10,900 companies by year’s end, including 100 billion won secured through the supplementary budget. “We will swiftly execute the existing export voucher program so the effects of fiscal support reach the field quickly,” Lim said. He said the “Middle East-specialized emergency logistics voucher” was strengthened by adding support items that reflect business needs, including costs for rerouted shipments via the Middle East, return shipping, and demurrage charges. Lim added that, with the budget significantly expanded through the supplementary budget, the government will introduce a fast-track review system to complete beneficiary selection within one month of application to speed up support.* This article has been translated by AI. 2026-04-27 17:39:27
  • South Korea Finance Ministry Awards 30 Million Won in Special Bonuses to 24 Officials
    South Korea Finance Ministry Awards 30 Million Won in Special Bonuses to 24 Officials The government awarded special bonuses totaling 30 million won to Ministry of Finance and Economy officials credited with key achievements, including responses to the Middle East war and efforts to secure inclusion in the World Government Bond Index, or WGBI. The ministry said it held its first special performance awards ceremony on the 27th during an expanded senior staff meeting chaired by Deputy Prime Minister and Finance Minister Koo Yun-cheol. It selected 24 employees for raising the ministry’s standing and contributing to the national interest. The top honor, the “Public Impact Grand Prize,” went to six people including Choi Bong-seok, a senior official in the Comprehensive Policy Division. They received 10 million won for building an emergency response system after the Middle East war broke out in February, including round-the-clock monitoring of the macroeconomy and prices through a standing joint emergency task force with related agencies. The “Value Creation Award” went to three people including Park Se-woong, an official in the Foreign Exchange System Division. The ministry said they were recognized for persuading overseas investors and relevant authorities and preparing a won temporary borrowing (OD) plan, leading to confirmation of South Korea’s WGBI inclusion despite opposition from some investors. Winners received 6 million won. The “Future Growth Award” went to two teams, each receiving 4 million won. One team, including Jang Woo-jin of the Foreign Exchange System Division, was cited for resolving financial settlement difficulties during the import process for Russian crude oil and petroleum products, helping stabilize companies’ raw material supplies. Another team, including Jeong Yeo-jin, a director in the Strategic Economy Coordination Division, was recognized for supporting swift legislation of the “Korea-U.S. Strategic Investment Special Act” to help ease external uncertainty. The “Diligence and Advancement Award” went to three teams, each receiving 2 million won. The ministry said one team, including Kim Ji-eun, a supply chain response officer, created a 1.5 trillion won “Special Support for Middle East Damage Response” program. Another team, including Cho Jung-yeon, a team leader in the Treasury General Division, pushed a pilot project for blockchain-based treasury disbursements. Cho Seong-a, an official in the Tax Policy Office, was also included after developing an AI chatbot to help interpret rules for exchanging information on crypto assets. The ministry said 20% of the bonuses were paid in Onnuri gift certificates, describing it as a way to share rewards with small merchants and local commercial districts. Koo said the ministry plans to provide clear incentives to employees who deliver exceptional results to foster a more performance-driven workplace.* This article has been translated by AI. 2026-04-27 17:00:14
  • South Korean Won Opens Stronger vs. Dollar Despite Failed U.S.-Iran Truce Talks
    South Korean Won Opens Stronger vs. Dollar Despite Failed U.S.-Iran Truce Talks The South Korean won opened stronger against the U.S. dollar on Monday as market optimism held up despite the collapse of a second round of U.S.-Iran ceasefire talks. In Seoul trading, the won was quoted at 1,477.4 per dollar as of 9:20 a.m. It opened at 1,477.6, down 6.9 won from the previous session. On April 25 (local time), Iran left Pakistan ahead of a planned visit by a U.S. envoy, and the U.S. negotiating team also canceled its trip. The developments effectively scuttled a second round of U.S.-Iran talks that had been expected to take place in Pakistan. U.S. President Donald Trump wrote on his social media platform Truth Social that he had "just canceled" the delegation’s schedule to travel to Islamabad, Pakistan, to meet Iranian officials, saying too much time would be wasted traveling and that he had "a lot to do." "We have all the cards and they have no cards," Trump wrote, adding, "If they want to talk, they can just call." He left open the possibility of dialogue by phone or other channels. In a call with online outlet Axios, Trump said "no" when asked whether the failed talks meant a resumption of war with Iran, adding, "We haven’t thought about that yet." Bitcoin rose on Sunday, suggesting limited damage to risk appetite from the failure of face-to-face talks between the two countries. Min Kyung-won, an economist at Woori Bank, said South Korean stocks are likely to attempt a limited rise as buying by retail and institutional investors flows in. She added that the exchange rate is likely to face more downward pressure, supported by end-of-month exporter dollar selling and a positive lift from equities.* This article has been translated by AI. 2026-04-27 09:28:03
  • South Korea’s Tax Revenue Swings Raise Concerns Over Budget Forecast Accuracy
    South Korea’s Tax Revenue Swings Raise Concerns Over Budget Forecast Accuracy National tax revenue is rising faster than expected this year, fueling expectations that the tax surplus will exceed the government’s initial forecast. Economists and budget analysts, however, warn that repeated forecasting errors could undermine confidence in fiscal management. According to the Ministry of Economy and Finance on the 26th, national tax revenue in January and February totaled 71 trillion won, up 10 trillion won (16.5%) from a year earlier. By category, income tax rose 2.4 trillion won, value-added tax increased 4.1 trillion won, and the securities transaction tax climbed 1.2 trillion won. Revenue is also coming in earlier than usual. As of February, the collection rate versus the annual budget stood at 18.2%, 1.4 percentage points above the five-year average of 16.8%. The government previously projected a tax surplus of about 25.2 trillion won compared with the main budget and used it to fund a supplementary budget. With talk of additional gains in some items, including housing holding taxes, some observers say the surplus could be larger. The concern is that tax revenue volatility has widened sharply in recent years. Surpluses reached 61.3 trillion won in 2021 and 52.6 trillion won in 2022, but were followed by shortfalls of 56.4 trillion won in 2023, 30.8 trillion won in 2024 and 8.5 trillion won in 2025. Such swings are seen as weakening predictability and transparency in fiscal operations, especially when errors run into the tens of trillions of won, reducing the effectiveness of medium- and long-term fiscal plans. Underestimating revenue can increase incentives to draft supplementary budgets, while overestimating can lead to spending cuts or additional bond issuance, potentially hurting fiscal stability. The government has emphasized that the latest supplementary budget is “bond-free” because it uses surplus revenue. Critics note that if the entire surplus is spent, less will remain as a year-end surplus that could have been used to repay government debt, producing an effect similar to issuing additional bonds in terms of fiscal soundness. The National Assembly Budget Office said both under- and over-budgeting revenue causes inefficiency and unnecessary administrative costs. It said the case, in which about 25 trillion won in revenue error emerged just three months after the fiscal year began, calls for a broader review of the tax revenue forecasting system rather than being treated as a simple miscalculation. Analysts attribute the volatility to a tax structure heavily dependent on the business cycle and asset markets. Major taxes such as corporate tax and capital gains tax are sensitive to economic conditions and asset prices, amplifying swings. Limits in forecasting methods — including repeated conservative or overly optimistic errors when incorporating economic outlooks — are also cited. Experts say institutional improvements are needed to better manage volatility, including more sophisticated forecasting models and a framework that improves predictability in medium- and long-term fiscal planning. Kim Jeong-sik, an emeritus professor of economics at Yonsei University, said accurate revenue forecasts require credible growth projections and consideration of policy variables, including tax law changes and real estate-related capital gains and holding taxes. “Because this process is also tied to the National Assembly, there are aspects that make forecasting difficult,” he said.* This article has been translated by AI. 2026-04-27 05:04:11
  • Banks Lift South Korea Growth Forecasts After Q1 Surge, but Potential Growth Seen Sliding
    Banks Lift South Korea Growth Forecasts After Q1 Surge, but Potential Growth Seen Sliding Global investment banks have been raising their forecasts for South Korea’s growth after a surprise first-quarter jump, but economists warn the country’s underlying growth capacity continues to weaken, with potential growth projected to fall into the mid-1% range next year. According to government-related sources on April 26, major investment banks recently revised up their outlooks for South Korea’s growth. JPMorgan lifted its forecast to 3.0% from 2.2%, an increase of 0.8 percentage points, and Citi raised its estimate by 0.7 points to 2.9%. Both are well above the government’s 2.0% growth target presented early this year. The upgrades largely reflect the first-quarter “surprise” result. The Bank of Korea said on April 23 that real gross domestic product grew 1.7% from the previous quarter. It was the strongest quarterly growth since the third quarter of 2020, when the economy expanded 2.2%, marking the highest level in five years and six months. Some analysts cautioned the surge may prove temporary. They pointed to base effects after last year’s unusually weak growth, combined with a stronger semiconductor cycle and currency-related factors. Measures of the economy’s fundamentals, however, show a weakening trend. The Organization for Economic Cooperation and Development projects South Korea’s potential growth rate will fall to 1.71% this year from 1.92% last year, a decline of 0.21 percentage points, and then slip further to 1.57% next year. Potential growth refers to the maximum pace an economy can sustain without stoking inflation while fully using labor and capital. South Korea’s potential growth has been declining since 2012, when it was 3.63%, and fell below 2% for the first time last year. If the trend continues, it would extend the decline to 15 consecutive years through next year. Analysts attribute the slide to structural factors including low birthrates and rapid aging that reduce labor and capital inputs, along with slower productivity gains. They say a short-term growth surprise is unlikely to reverse the trend, and some have raised concerns about a growth model heavily reliant on semiconductors. Jeon Gyu-yeon, an analyst at Hana Securities, said the jump reflects the semiconductor upturn but also that negative effects from the war in the Middle East have not yet been fully felt. “With weaker consumer sentiment and higher raw material prices, private consumption and construction investment are likely to slow,” Jeon said. He added that after the Strait of Hormuz is reopened, a surge in crude oil imports could sharply weaken the contribution from net exports. * This article has been translated by AI. 2026-04-26 16:21:48
  • Korean Won’s Real Value Hits 17-Year Low as Middle East War Lifts Oil, FX Rates
    Korean Won’s Real Value Hits 17-Year Low as Middle East War Lifts Oil, FX Rates The won’s real value fell last month to its lowest level since the global financial crisis, pressured by a Middle East war that pushed up both the exchange rate and energy prices. According to the Bank for International Settlements on April 26, South Korea’s real effective exchange rate (REER) index stood at 85.44 (2020=100) at the end of March, down 1.57 points from a month earlier. It was the lowest reading in 17 years, since March 2009 (79.31). The REER measures a currency’s external purchasing power, reflecting not only the nominal exchange rate but also price levels and the currencies of major trading partners. A reading above 100 indicates overvaluation versus the base year, while below 100 suggests undervaluation. After staying above 100 from October 2020 through July the following year, the index hovered in the mid-90s amid a strong dollar and weaker Asian currencies. It slipped into the low 90s following the December 2024 martial law episode and then moved sideways. As the won-dollar rate jumped in October last year, the index fell into the 80s and has remained below 90 for six straight months through last month. Among 64 economies tracked by the BIS, South Korea’s REER last month was the third-lowest, after Japan (66.33) and Norway (72.7). The Japanese yen also fell to its weakest level since Japan adopted a floating exchange rate system in 1973. The latest decline was attributed to a combination of higher oil prices and a sharp rise in the exchange rate linked to the Middle East war. The won-dollar rate rose 6.3% last month based on weekly closing prices, briefly topping 1,500 won per dollar for the first time since the financial crisis. A surge in energy prices also lifted import costs, eroding the won’s real purchasing power. The Bank of Korea said the import price index for March (in won terms, preliminary) rose 16.1% from the previous month to 169.38, from 145.88. It marked the steepest monthly increase since January 1998 (17.8%), 28 years and two months earlier. With the United States and Iran entering a ceasefire, the exchange rate’s rise has eased somewhat this month. Still, the won has remained elevated around 1,470 to 1,480 per dollar amid ongoing geopolitical uncertainty and high oil prices. Kim Yu-mi, a researcher at Kiwoom Securities, said recent trading has shown a clear pattern: when risks ease, the dollar weakens and the exchange rate falls, but when anxiety returns, upward pressure intensifies. She added that the exchange rate’s direction will likely be determined by the relative investment appeal of domestic assets compared with those in the United States. If dollar weakness continues through the third quarter, she said, stronger preference for Korean assets could increase foreign inflows while slowing overseas investment by residents, adding downward pressure on the exchange rate.* This article has been translated by AI. 2026-04-26 15:48:21
  • South Korea Reviews Supply Chains, Economic Security After Middle East War
    South Korea Reviews Supply Chains, Economic Security After Middle East War South Korea’s government is working to set policy directions for an economic restructuring aimed at responding to heightened global uncertainty following the Middle East war. The Finance and Economy Ministry said it held a meeting April 24 at the Government Complex Seoul with experts from state-funded research institutes under the National Research Council for Economics, Humanities and Social Sciences to discuss policy directions for the economy after the war. Participants included the Korea Institute for Industrial Economics and Trade, the Korea Development Institute (KDI), the Korea Institute for International Economic Policy, the Science and Technology Policy Institute, the Korea Energy Economics Institute, the Korea Labor Institute, the Korea Environment Institute and the Korea Research Institute for Human Settlements. Kang Ki-ryong, assistant vice minister at the ministry, said the situation remains uncertain because developments in the Middle East war are changing by the moment, but urged participants to help identify short- and long-term policy tasks so the country can prepare in advance. Attendees agreed the crisis has again underscored the importance of supply chains and economic security, and said the government should consider in advance how the economic system may change and prepare response strategies. The ministry said it plans to broaden the collection of expert views, including through cooperation with the National Economic Advisory Council.* This article has been translated by AI. 2026-04-26 12:06:55
  • South Korea Reviews External Economic Risks as Middle East Tensions Rise
    South Korea Reviews External Economic Risks as Middle East Tensions Rise The government has begun reviewing risks and preparing responses to recent shifts in the international order, including instability in the Middle East. The Ministry of Economy and Finance said Sunday that it held a meeting with external-economy experts on April 24 at the Government Complex Seoul to discuss economic risks stemming from changes in global conditions and possible policy responses. The session was convened to consider steps to address external uncertainties such as geopolitical tensions in the Middle East, growing supply chain uncertainty and the spread of protectionism. Participants said the Middle East situation has underscored the importance of energy security, calling for diversification of energy supply chains alongside a transition to cleaner energy. They also agreed that policy responses must be flexible and swift. With protectionism spreading and supply chain restructuring accelerating, participants also raised the need to secure key supply chains more reliably and strengthen strategic economic cooperation. They urged expanding cooperation with technologically advanced countries in advanced technology and strategic industries, and pursuing export and supply chain diversification to reduce dependence on specific regions. They also warned that geopolitical risks could shrink overseas construction markets, and said the government should set up a preemptive support system while strategically using future opportunities. Vice Minister Heo Jang said it is important to pursue a balanced approach between managing external risks and preparing mid- to long-term responses. “Based on the discussions at this meeting, we will make our policy direction more concrete and continue communication with the field,” he said.* This article has been translated by AI. 2026-04-26 12:06:26
  • South Korea launches 2026 AI Innovation Challenge to expand AI use in public agencies
    South Korea launches 2026 AI Innovation Challenge to expand AI use in public agencies The government will hold the inaugural "2026 Public Agencies AI Innovation Challenge" to broaden the use of artificial intelligence across public institutions. The Ministry of Economy and Finance said on the 26th it has announced the public-agency track of the "National AI Competition," which opened on March 26 and includes 14 tracks. The challenge is hosted by the Ministry of Economy and Finance and the Ministry of Science and ICT, and organized by the National Information Society Agency. The government created the track for the first time this year to encourage wider AI adoption in public agencies. Participating institutions will use AI to improve administrative efficiency and identify innovative services the public can experience. The competition has two categories: "AI Service Demonstration," in which public agencies plan and test public AI services, and "Best Practices in AI Use," which evaluates results and examples of broader adoption. Entries in each category will be accepted under either open topics or designated topics aimed at addressing social issues. Any public agency listed under the ALIO public disclosure system that wants to participate may apply from June 1 to Aug. 28. After two rounds of expert review, including document screening and presentations, the government plans to select about 30 top cases and hold an awards ceremony in the fourth quarter. It said it will offer incentives such as bonus points in management evaluations and support agencies in adopting advanced AI technologies to generate demand for innovation and serve as test beds for private companies. Jang Jeong-jin, director general for public policy at the ministry, said, "This year, we must quickly produce tangible results that the public can feel through the introduction of AI in public agencies," adding, "Through this challenge, we will actively identify field-driven model cases of innovation and expand them across the public sector."* This article has been translated by AI. 2026-04-26 12:04:06
  • Mandatory Spending Nears 55% of South Korea Budget as Basic Pension, Education Grants Top 100T Won
    Mandatory Spending Nears 55% of South Korea Budget as Basic Pension, Education Grants Top 100T Won More than half of the government’s total spending next year is set to be locked in as legally mandated outlays, rapidly narrowing fiscal flexibility. The basic pension and education grants to local governments are emerging as key drivers of the burden as they approach a combined 100 trillion won a year. According to the government’s 2025-2029 National Fiscal Management Plan submitted to the National Assembly last year, total spending next year is projected at 764.4 trillion won, with mandatory spending at 415.1 trillion won, or 54.3%. With mandatory spending rising faster on average (6.3% a year) than total spending (5.5%), its share is expected to climb to 55.0% in 2028 and 55.8% in 2029. Most mandatory spending is statutory welfare outlays, including basic livelihood support, health insurance, the four major public pension programs and the basic pension. As South Korea enters a super-aged society, both the number of recipients and benefit payments are increasing. Related spending is estimated to exceed 200 trillion won next year and expand to 237 trillion won by 2029. Beyond welfare, the cost of transfers to local governments is also rising quickly. Local allocation tax and education grants, which are linked to domestic tax revenue, are expected to top 150 trillion won next year and reach the 170 trillion won range by 2029. The basic pension and education grants are cited as variables that could reshape the fiscal structure. As the government has set a goal of cutting mandatory spending by 10% during the process of drafting next year’s budget, observers expect reform talks around the two programs to accelerate. The basic pension is seen as a leading item with room to adjust eligibility and payment methods. President Lee Jae-myung has proposed differentiated payments based on the principle of “the higher, the lower,” increasing the likelihood of changes. Education grants, meanwhile, automatically rise because they are tied to domestic tax revenue even as the school-age population declines. That structure has fueled recurring debate over surplus funds, and critics warn the fiscal burden could grow further if tax revenue increases, such as from strong semiconductor exports. Under the fiscal plan, basic pension spending is projected to rise from 25 trillion won next year to 28.2 trillion won in 2029, while education grants increase from 77.1 trillion won to 85.9 trillion won. Combined, the two items are expected to total about 100 trillion won and account for roughly one-quarter of mandatory spending. Academics have already outlined potential savings under reform scenarios. A research report commissioned by the Ministry of Economy and Finance, now the Ministry of Planning and Budget, found that gradually raising the eligibility age for the basic pension could save up to 603.4 trillion won through 2065. Analysts have also said revising the formula that links education grants to domestic tax revenue could significantly reduce the burden. Kim Hak-su, a senior research fellow at the Korea Development Institute, estimated in a report that savings could reach up to 1,046.8 trillion won from 2021 to 2060.* This article has been translated by AI. 2026-04-26 11:19:08