[2026 National Assembly Audit] Shin Hyun-song on Future Response Fund: "Even if intended to cushion the economy, it can amplify upward and downward pressures"

Bank of Korea Audit by the National Assembly's Finance and Economy Committee

Bank of Korea Governor Shin Hyun-song said on October 12 that the government’s proposed Future Response Fund could sometimes have the opposite effect, saying, “Even when it is intended to cushion the economy, actual cases show that it can be procyclical and can instead amplify both downward and upward pressures on the economy.”

Shin made the remarks during a National Assembly audit at the Bank of Korea, saying, “Fiscal policy takes a considerable amount of time to implement.”

The ruling and opposition parties are at odds over the Future Response Fund, which the government plans to launch with a budget of 45.4 trillion won, funded by excess tax revenue generated in part by the semiconductor boom. The ruling camp says the fund is essential to prepare for the future, while the opposition is raising concerns about fiscal soundness.

Shin said, “The Bank of Korea will always consider how to coordinate monetary policy with fiscal policy.”

When Kim Tae-nyeon of the Democratic Party of Korea asked, “If fiscal policy responds appropriately during an economic downturn, wouldn’t that ease the burden on monetary policy to stabilize the economy?” Shin replied, “It has a micro-level effect.”

Yonhap News

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