Koo Yoon-cheol, Deputy Prime Minister and Minister of Economy and Finance, stated that the South Korean economy is on track for a 3% growth rate this year for the first time in five years, driven by strong semiconductor performance and improvements in consumption and investment. However, he emphasized the need to focus policy efforts on economic structural innovation and stabilizing livelihoods due to ongoing risks from high oil prices and inflation.
During a meeting of the Emergency Economic Headquarters and the Ministerial Meeting on Economic Structural Innovation held at the Government Complex in Seoul, Koo noted, "The current account surplus for June has reached a historic high of $50 billion for the first time," adding that, "Thanks to the strong semiconductor sector, exports have hit record levels, and consumption and investment continue to improve, making a 3% growth trajectory highly likely after five years."
The current account surplus for June was recorded at $49.73 billion, following increases from $13.26 billion in January, $23.19 billion in February, $37.93 billion in March, and $38.61 billion in May.
Consumer price inflation fell to 2.8% last month, marking a return to the 2% range for the first time in three months. The government attributes this decline to measures such as reducing the maximum price of oil and providing discounts on agricultural and livestock products.
However, the government continues to identify the burdens on livelihoods from the Middle East conflict and high oil prices as significant risk factors. Koo stated, "The uncertainty surrounding the Middle East conflict remains, and the accumulated burden of high oil prices continues to pose challenges for the economy. Given the base effect from last year's temporary discount on communication fees and the upward risks to prices from heatwaves, we must maintain vigilance and continue our multi-agency efforts for price stability."
Koo also expressed concern about the concentration of economic recovery in certain industries, particularly semiconductors. He warned, "Our economy faces risks to growth from low birth rates and an aging population, as well as intense pressures from industrial transformation due to supply chain restructuring. If the current semiconductor boom does not spread across the economy, there are concerns that polarization in industries, regions, and income and asset levels could deepen."
He affirmed the government's commitment to focusing all efforts on 'economic structural innovation' to boost potential growth rates and achieve inclusive growth. He stated, "We need to create tangible changes that citizens can feel by innovating the structures of existing key industries like steel, fostering new industries, and addressing disparities in assets, income, labor, generations, and regions."
To this end, the government will operate the Economic Relations Ministers' Meeting as a 'Structural Innovation Ministers' Meeting' to discuss economic structural innovation measures monthly. Plans are underway to promote AI manufacturing process innovations and high-value transitions in key industries such as steel and petrochemicals, as well as to focus on developing the robotics industry, which is central to physical AI.
Measures to strengthen safety nets for vulnerable groups to reduce livelihood and financial insecurity will be established in the second half of the year. Revisions to basic and retirement pension plans will be announced soon, and the 'Basic Law on Workers' Rights' is set to be established within the year.
The government plans to enact a National Asset Basic Law to reform the management system of state-owned assets towards active operation and value creation. Additionally, it aims to train over 200,000 professionals in advanced and preferred fields such as AI by 2030 and to create 300,000 jobs and startups as part of a youth job recovery plan, which will be announced promptly.
* This article has been translated by AI.
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