Lead
South Korea's finance minister, Koo Yun-cheol, has vowed to take "timely" measures to address rising volatility in financial markets and potential energy supply disruptions, even as he expressed confidence in the country's economic fundamentals. The government has raised its 2025 growth forecast and highlighted record exports, but faces mounting criticism over policy decisions that some blame for extreme stock market swings.
Coverage Comparison
Reporting by Yonhap News Agency captures a series of statements from Finance Minister Koo Yun-cheol over several weeks, reflecting both caution and optimism. In late July, Koo called for vigilance over potential energy supply disruptions following renewed geopolitical tensions in the Middle East, vowing to take preemptive measures when necessary. The finance ministry noted that South Korea maintains stable stockpiles of crude oil and naphtha, and said it would maintain current measures to ensure stable supplies while taking additional actions as needed.
By July 31, Koo acknowledged "rising volatility in the financial markets and the prolonged Middle East war," pledging to closely monitor economic conditions and take timely steps. He cited industrial production data showing a 2.3 percent month-on-month increase in June—the sharpest growth since June 2020—as evidence that economic fundamentals remain strong.
On August 6, Koo struck a more optimistic tone, saying the South Korean economy is "more solid than ever" and achieving "unprecedented" results on the back of solid growth and exports. He noted that the government had raised its 2025 growth forecast to 3 percent from an earlier projection of 2 percent, citing a semiconductor supercycle and easing uncertainties in the Middle East. Exports reached a record high of $102.2 billion in June, driven by global demand for memory chips, and the economy expanded 3.8 percent in the first half of the year year-on-year.
However, a separate report by Yonhap details criticism of the government's handling of stock market volatility. Bloomberg published a commentary arguing that Korea is becoming "uninvestable," pointing to a roughly 40 percent plunge in the benchmark stock index over 27 trading sessions. The commentary identified policy missteps, including the introduction of single-stock leveraged exchange-traded funds (ETFs) and an unexplained expansion of the National Pension Service's allocation to domestic equities, as factors that amplified market swings. On one day alone, shares of Samsung Electronics fell 6.3 percent and SK hynix plunged 10.37 percent, triggering a trading curb.
In response, Koo said the government is working to stabilize the market and make the country a more attractive destination for investors. He cited recent signs of stabilization in stock indexes and announced measures including restrictions on transactions involving single-stock leveraged ETFs, which were introduced in May and have been widely viewed as a key factor behind the volatility.
Key Claims
- South Korea's finance minister called for vigilance over potential energy supply disruptions and vowed to take preemptive measures when necessary, as reported by Yonhap News.
- The country has stable stockpiles of crude oil and naphtha, according to the finance ministry.
- The government will maintain current measures to ensure stable supplies and take additional actions when necessary, the minister said.
- Koo expressed confidence in the economy, saying it is achieving "unprecedented" results on the back of solid growth and exports.
- The government raised its 2025 growth forecast to 3 percent from 2 percent.
- Exports reached a record high of $102.2 billion in June.
- Industrial production rose 2.3 percent in June from a month earlier.
- The government will accelerate efforts to stabilize people's livelihoods and strengthen the business ecosystem.
- The introduction of single-stock leveraged ETFs has been widely viewed as a key factor behind recent volatility in the domestic stock market.
- The government faces allegations that it introduced high-risk financial products without conducting proper stress tests.
- Calls are growing for a transparent investigation and accountability regarding the introduction of high-risk financial products.