Hyung-il Lee, to Fitch, “AI and semiconductor boom, potential growth rate rebound expected”

Deputy Prime Minister and Minister of Finance and Economy Lee Hyung-il met with the annual advisory group of international credit rating agency Fitch on the 5th to discuss the recent Korean economic situation and major policy directions.

Deputy Prime Minister Lee explained that the Korean economy is likely to grow in the mid-3% range this year as the boom in artificial intelligence (AI) and semiconductors drives exports and investment, and the potential growth rate is expected to rebound from the downward trend.

In addition, he said that it is important to connect the current economic boom to sustainable growth, and that the government is promoting three major mega projects, including semiconductors, physical AI, and AI data centers, to increase potential growth rate.

In particular, he said he plans to continue to strengthen the foundation for the growth of the Korean economy by actively supporting the spread of productivity improvements resulting from the AI ​​and semiconductor boom to other industries and domestic demand.

He said that despite the boom in some industries, such as semiconductors, the growth gap between industries and regions continues, so he is focusing his policy capabilities on alleviating polarization and spreading growth results.

In addition, the company announced that it will efficiently utilize the increase in tax revenue resulting from the AI ​​and semiconductor boom to invest in future growth and strengthen financial soundness, and that it plans to invest in growth engines through the Future Response Fund and prepare for future external shocks by accumulating a significant portion of the temporary increase in tax revenue.

He also emphasized that he will promote performance-based fiscal management and expenditure restructuring to improve mid- to long-term fiscal sustainability, including managing the national debt ratio to less than 50% by 2030.

The Ministry of Finance and Economy reported that Fitch showed great interest in whether the recent Korean economic boom can be structurally sustained beyond the temporary semiconductor business cycle.

Deputy Prime Minister Lee emphasized that despite structural difficulties such as population decline and aging, it will be possible to increase productivity and enhance the potential growth rate of the overall economy through fostering growth engines such as large-scale facility investment and spreading AI to regional and small and medium-sized businesses.