S. Korea's growth momentum to strengthen amid chip boom: finance minister

By Kang Yoon-seung

BANGKOK, Oct. 18 (Yonhap) -- Finance Minister Lee Hyoung-il has stressed South Korea's economic growth is set to gain further momentum amid the chip supercycle during meetings with officials from global credit rating agencies, his office said Sunday.

Lee met separately with senior officials from three global credit rating agencies -- Moody's, Fitch and S&P -- on the sidelines of the Annual Meetings of the International Monetary Fund and the World Bank Group in Bangkok, according to the Ministry of Finance and Economy.

The meetings involved Marie Diron, global head of Moody's Sovereign and Sub-Sovereign Risk Group; James Longsdon, global group head of Sovereign and Supranational Ratings at Fitch Ratings; and Roberto Sifon-Arevalo, global head of sovereign analytics and research at S&P Global Ratings.

According to the ministry, the finance minister briefed them on South Korea's recent economic performance.

He said South Korea is projected to grow at the 3 percent range this year, supported by solid chip exports and increased facility investment, with the growth momentum expected to strengthen over the medium to long term.

Lee added that the government will spare no effort to develop future growth engines through government-led initiatives, including the three megaprojects and the green transition.

To achieve sustainable growth, Lee emphasized the need to address economic disparities as the government pursues measures to support vulnerable groups in three key areas -- housing, jobs and financial services.

The government is also working to narrow disparities among businesses, generations, income groups and regions.

The finance ministry said the three credit rating agencies expressed keen interest in how the South Korean government plans to use strong tax revenues from the chip supercycle. Lee explained details of the Future Fund, which will launch next year.

The credit rating agencies noted the supercycle in the semiconductor and artificial intelligence (AI) industries has helped South Korea cope with other challenges, such as population aging and the war in the Middle East.

They said South Korea maintains stable economic indicators and sound public finances, noting their assessments of Asia's No. 4 economy remain stable, according to the ministry.

Meanwhile, Lee met with senior officials from multilateral development banks, including the European Bank for Reconstruction and Development (EBRD) and the Central American Bank for Economic Integration (CABEI), and signed separate memorandums of understanding (MOUs) to enhance exchanges in AI.

EBRD President Renaud-Basso said South Korea is playing a leading role in the AI sector, noting the EBRD hopes to enhance its capacity and expertise through cooperation with the country, according to the ministry.

She highlighted potential cooperation with South Korea in various areas of nuclear energy, including reactor safety.

Lee asked the EBRD to actively promote the use of South Korean firms' advanced technologies in the bank's various energy and nuclear projects.

During a meeting with Gisela Sanchez, president of the CABEI, the two sides signed an MOU on establishing an AI and digital transformation center and a separate agreement providing a legal basis for the bank's existing office in the country.

Lee asked the CABEI to identify specific AI projects drawing on the capabilities of both sides, with Sanchez expressing hope South Korean firms would expand their presence in the region through such projects.

Lee also held a series of bilateral meetings during his first major international event since taking office last month.

Following Friday's "two-plus-two" meeting between senior South Korean and U.S. finance and monetary officials, Lee met separately with U.S. Deputy Treasury Secretary Francis Brooke, stressing the need for close communication and cooperation.

In talks with Swiss President Guy Parmelin, Lee discussed potential cooperation in areas such as AI, while expressing interest in Switzerland's foreign exchange policies and economic resilience. Parmelin noted that the free trade agreement between South Korea and the European Free Trade Association had provided a solid foundation for bilateral ties.

Lee also exchanged views with Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan on energy, defense, infrastructure and sovereign wealth funds, asking Saudi Arabia to share its experience in operating the Public Investment Fund.

In a meeting with Polish Finance Minister Andrzej Domanski, Lee expressed hope for closer defense cooperation. Poland was invited to this year's G20 finance ministers' meeting.

Lee took part in 25 sessions during his Bangkok visit, including 19 bilateral meetings, according to the finance ministry.

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colin@yna.co.kr
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