Gu Yoon-chul Responds to KOSPI Bubble Claims: "Such Concerns Arise When Innovation Efforts Are Lacking"

Gu Yoon-chul, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, refuted recent claims of a KOSPI bubble, stating, "Such concerns arise when innovation efforts are lacking."

Appearing in a video released on the YouTube channel SamproTV on May 30, Deputy Prime Minister Gu emphasized, "We will promote structural reform and a rebound in the potential growth rate through our economic growth strategy for the second half of the year."

Regarding the economic growth rate forecast to be announced in the upcoming economic growth strategy for the second half of the year next month, he said, "I am also curious," choosing to remain cautious, but hinted at the possibility of an upward revision.

He explained, "As the President mentioned in the Cabinet meeting, there are forecasts that the nominal growth rate could reach 10%. In 2002, it was 11%, and in 2010 it was 9.9%. However, we will have to wait and see, as it is uncertain how long the Middle East variable and the semiconductor cycle will last."

On the outlook for tax revenue boosted by the semiconductor boom, Deputy Prime Minister Gu stated, "It is clear that there will be excess tax revenue," but refrained from specifying an exact amount, adding, "We will only know after confirming the interim corporate tax payments in August."

Regarding the use of excess tax revenue, he explained, "If we boldly invest in developing items on par with second- and third-generation memory semiconductors and create a virtuous cycle, we will see even more excess tax revenue. This is the first priority."

He continued, "To address structural issues such as polarization in our society and challenges faced by small business owners and the self-employed, we must also invest boldly in capacity-building measures that teach people how to catch fish, not just give them fish. It is my opinion that a substantial portion should be reinvested in fostering youth entrepreneurship and AI education to build a future-oriented structure." He also announced plans to invest excess tax revenue into a Korean sovereign wealth fund to create a long-term investment platform for future generations.

Regarding the Yoon Suk Yeol administration's fiscal tightening, Deputy Prime Minister Gu stated, "The previous administration reduced the research and development (R&D) budget, leading to a decline in tax revenue and a larger fiscal deficit. In this era of an AI-driven transformation, we must boldly invest in promising items. Please watch what happens to national debt and the deficit next year," he emphasized.

Deputy Prime Minister Gu named "sensors" as a candidate industry for concentrated investment going forward. He explained, "To transition to an AI economy, in addition to a 'brain' that stores data, we need sensors that serve as 'eyes.' Sensors are also a type of semiconductor."

Regarding real estate policy, he said, "While real estate speculation is a matter of personal freedom and cannot be controlled, at the very least, the government will not provide support such as financial assistance to such activities."

He emphasized, "We will provide support from the demand side only to actual residents, and policies that support non-residents with money or systems will not be implemented."

On the won-dollar exchange rate surpassing the 1,500-won threshold, he explained, "It is not because there is a shortage of dollars in Korea or a decline in the value of money. Rather, as the Korean stock market has risen, this is a phenomenon resulting from foreigners rebalancing their portfolios."

Addressing concerns about inflation caused by the Middle East war, Deputy Prime Minister Gu said, "The government is doing everything possible, such as implementing an oil price cap and reducing fuel taxes, so we are managing the situation more stably than other countries. However, I do not think the government has done well enough, and we will manage things even more carefully to ensure that the public does not suffer from price instability," he stressed.

This content was produced with the assistance of AI translation services.