Finance minister hints S. Korea to record under 2 pct growth in 2025

Finance Minister Choi Sang-mok said Monday that South Korea’s economic growth is likely to fall below 2 percent next year, citing various downside risks, including the recent domestic political turmoil.

The Bank of Korea and other institutions had earlier projected growth of approximately 2 percent for Asia’s fourth-largest economy in 2025, reflecting a slower-than-expected recovery in domestic demand amid heightened uncertainties at home and abroad.

“Given the significant downside risks, next year’s growth forecast is likely to be revised downward, potentially dipping slightly below the country’s potential growth rate,” Choi said during a press briefing.

The minister highlighted weakened consumer sentiment following the “unfortunate incident,” referring to President Yoon Suk Yeol’s brief imposition of martial law earlier this month, which was overturned by the National Assembly.

“While this is not a crisis-level outlook, the expansion of uncertainties poses challenges,” Choi added.

To address such challenges, the government plans to front-load 431.1 trillion won (US$300.2 billion), or 75 percent of the 2025 fiscal budget of 574.8 trillion won, during the first half of the year.

Choi said the focus will be on stabilizing livelihoods and supporting socially vulnerable populations, particularly self-employed businesses mostly affected by the prolonged domestic slump.

“I have instructed for a fundamental shift in our approach to ensure that the budget can be utilized as early as January 1,” Choi said, emphasizing the importance of timely and efficient resource allocation.

Choi, who doubles as deputy prime minister for economic affairs, reiterated the government’s commitment to maintaining credibility among foreign investors.

“Amid uncertainties in the global trade environment, especially with the inauguration of the Donald Trump administration, our focus will be on responding proactively while enhancing South Korea’s industrial competitiveness over the long term,” Choi stated.