On KOSPI bubble talk, Koo Yun-cheol says concerns arise when there is no effort to innovate

[Financial News] Deputy Prime Minister for Economic Affairs and Minister of Finance and Economy Koo Yun-cheol pushed back against recent talk of a KOSPI bubble, saying, "Those concerns come up when there is no effort to innovate."
On the 30th, in a video appearance on the YouTube channel Sampro TV, Koo addressed the bubble debate triggered by the KOSPI's recent surge. "A bubble is the concern that arises when we do not make these efforts to innovate, when we simply spend money on one thing, and when we do not nurture dreams," he said. "Through the economic growth strategy for the second half of the year, we will present structural reform and a rebound in potential growth."
As the KOSPI has climbed above the 8,000 mark and continued its daily rally, he was responding to concerns raised by some over short-term overheating. The KOSPI rose 75.63% last year and has already jumped 101.13% so far this year.
In response to the view that structural reforms matching stock prices would make the market more resilient on the downside, he said the government has set a direction of investing in talent development and youth startups for the AI and Green Transition needed to move toward a hyper-innovative economy. "If such content-driven efforts are made, I think the market will judge our stock market accordingly," he said.
He was cautious about this year's growth outlook, but suggested an upward revision may be possible. Koo noted, "There are forecasts that nominal growth could reach 10%, but it was 11% in 2002 and 9.9% in 2010." He added, however, that variables in the Middle East and the durability of the semiconductor cycle still need to be watched.
On tax revenue prospects from the semiconductor boom, he said, "It is clear that the semiconductor boom will create more excess tax revenue." He added, "If we develop the next, third items comparable to memory semiconductors, invest boldly, and create a virtuous cycle, more excess tax revenue will come in."
He also stressed, "To resolve structural issues such as social polarization and the difficulties faced by small merchants and the self-employed, we must also spend boldly on capacity building that teaches people how to fish."

jisseo@fnnews.com Seo Min-ji Reporter