Kim Yong-beom: South Korea's Economy May Shift Long-Term Trends

Kim Yong-beom, head of the Presidential Policy Office, stated on July 12 that the South Korean economy is entering an initial phase that suggests a potential shift in long-term trends rather than just a simple recovery.

In a post on his Facebook, Kim noted, "The moment when the growth narrative that describes a country changes and the market's criteria for viewing that country's future shifts occurs perhaps once every 10 or 20 years."

He emphasized, "It is rare in economic history for policy and industrial cycles to amplify each other, but it seems that South Korea is entering such a phase in the second half of 2025. There is a strong possibility that 2025 will be remembered as the year when the long-term trend of the South Korean economy began to change direction."

Kim pointed out that a country previously cited as a representative example of low growth in East Asia is now being recognized as having the strongest growth momentum among advanced nations. He argued that this should not be viewed merely as a rebound, stating, "The market is redrawing the long-term trend line of the South Korean economy."

He added, "Now, growth rates in the upper 2% range are being discussed as realistic projections, and the recovery of a potential growth rate of 3%, which once seemed unrealistic, is no longer an unattainable goal."

Kim explained, "No matter how powerful the engine of production is, the economy cannot reach its maximum speed if the transmission that delivers that power is not functioning properly. What we are trying to change now is that transmission." He described capital market reform as not merely a policy to raise stock prices but as part of a growth mechanism aimed at spreading the benefits of production across the entire national economy.

However, he acknowledged that "we are still at the beginning stage," noting that issues such as low birth rates, aging population, and household debt remain. He also highlighted the need to enhance the status of the Korean won and manage the dependency on artificial intelligence (AI) and semiconductors.

Kim concluded, "The fact that structural problems remain and the fact that the growth trajectory is changing can coexist. South Korea could be the first country to break away from the path that Japan has followed most closely."