Korea’s finance minister said Tuesday the government is committed to building a favorable business environment by easing regulations and offering tax cuts as he asked businesses to invest proactively.
Finance Minister Choo Kyung-ho made the remark during a meeting with officials from the Federation of Korean Industries (FKI), one of Korea’s biggest business lobbies that speaks for large companies, according to the Ministry of Economy and Finance.
“In general, exports remain challenging without signs of a sharp recovery in the economy,” Choo said, noting the government has been making efforts to ease regulations and taxation to pave the way for business activities.
Exports fell for the eighth consecutive month in May, decreasing 15.2 percent on year. The decline came as exports of semiconductors, the country’s key export item, sank 36.2 percent on falling demand.
The minister asked the companies to invest more and build capabilities to lead the global market.
“Rather than the direct government intervention or expenditures, it is the private sector that leads the Korean economy and its future,” Choo added.
During the meeting, the FKI members urged the government to broaden tax support for companies, overhaul regulations and expand assistance for the carbon neutrality initiative.
Choo said the government will reflect the results of the discussion with the business groups.
Separately, Choo hinted that Korea’s inflation is anticipated to reach the 2 percent level in June or July.
Consumer prices, a key gauge of inflation, rose 3.3 percent in May from a year earlier, compared with a 3.7 percent on year advance in April, according to a recent report from Statistics Korea. The latest figure marked the lowest level since the 3.2 percent growth tallied in October 2021.
Choo, however, acknowledged the potential increase in consumer prices later in 2023, citing the impact of summer weather conditions on agricultural product prices.
“There are still uncertainties. The global prices of raw materials and oil have not yet entered a clear downward trend,” he said. “There are also other factors, such as weather and geopolitical risks.”