President Lee: "A rise in interest rates is unavoidable... The government must play a role in easing the burden on vulnerable groups"

[Financial News] President Lee Jae-myung said on the 1st that "a rise in interest rates is unavoidable right now," stressing that fiscal policy must play a careful role so that higher rates do not increase the burden on vulnerable groups or damage growth potential.
Presiding over the 38th State Council of South Korea meeting at Cheong Wa Dae that day, Lee said this while discussing next year's budget proposal. He noted, "We now stand at a crossroads between locking in low growth and a rebound in potential growth."
Lee said, "We need a productive fiscal strategy that uses expanded future resources to grow the economy, upgrade industrial capabilities, and then expand fiscal room again through that process." He added, "Fiscal policy must take on a precise role-sharing function to minimize the pain felt by vulnerable groups from rising interest rates and to ensure that growth potential is not damaged."
For next year's budget proposal, he set out key goals including creating new engines of future growth, building a ladder of hope for young people, easing polarization, and strengthening the safety net for everyday livelihoods. Referring to the Three Mega-Projects, 7 SEED policies, support of up to 200 million won per young person, the creation of 10 startup cities, the supply of 200,000 public housing units, and the expansion of basic income in rural areas, Lee said, "We will deliver results that people can actually feel."
He also called for stronger management of consumer prices ahead of Chuseok. Lee said, "Thanks to the explosive growth in exports, projections that our economy will grow by more than 3% this year are becoming a reality. But despite the generally favorable trend in key indicators, conditions on the ground remain difficult." He added, "Recent food prices, including meat and vegetables, have risen sharply, and the inflation burden felt by the public is considerable."
He pointed to the possibility of price instability centered on holiday goods, as damage to agricultural and livestock products from abnormal weather coincides with the early Chuseok holiday. He ordered expanded discounts on agricultural, livestock and fishery products, along with greater releases from stockpiled supplies. He also called for a thorough response to so-called "sneaky price hikes," in which companies raise prices even though lower exchange rates have reduced the cost of importing raw materials.
Turning to the Regular National Assembly session that began that day, Lee urged bipartisan cooperation. He said, "We must acknowledge that the government proposal is not always right and cannot be perfect." He instructed ministries to review the public's and lawmakers' criticism and alternatives with an open mind, adding that if there are reasonable points or proposals, they should be reflected promptly and faithfully in legislation and the budget.
Regarding flood damage in Nepal, he called for an early search for the nine missing South Korean nationals. He said, "If possible, I hope additional deployment of available equipment, including rescue personnel and helicopters, will also be actively pursued." He then urged authorities to ensure the safety of search teams in light of concerns over a second flood and severe weather, and instructed them to speed up humanitarian aid to Nepal.

[email protected] Sung Seok-woo Reporter