Government to Refocus Next Year’s Economic Policy on “Easing Polarization, Raising Potential Growth Rate”

"Revised outlook and supplementary measures to be announced next month"

Lee Hyeongil, Deputy Prime Minister and Minister of Finance and Economy, delivers opening remarks at an emergency economy ministers' meeting held at the Government Complex Seoul in Jongno-gu, Seoul, on the 11th. Ministry of Finance and Economy

The government has decided to focus its annual economic policy for 2027 on easing polarization and raising the potential growth rate. In line with a change to the economic forecast cycle, it will also release a revised outlook next month along with supplementary measures to address changing economic conditions.

Lee Hyeong-il, Deputy Prime Minister and Minister of Finance and Economy, announced the “2027 Economic Growth Strategy: Direction for Implementation” at an emergency economic ministers’ meeting he chaired at the Government Complex Seoul on the morning of November 11.

“The number of employed people in October continued to post double-digit growth for the fourth consecutive month, while the current account balance in September exceeded $60 billion for the first time in a single month, once again setting a record,” Lee said. “Even so, the government will not rest on its laurels and will mobilize all national resources to achieve stronger growth and improve people’s livelihoods.”

“Next year’s economic growth strategy will also focus on laying the foundation for sustainable growth by easing polarization and raising the potential growth rate,” he said. The government will not draw up a separate economic growth strategy for the second half of the year following the change to the forecast cycle; instead, it will present supplementary measures to address changed economic conditions when it releases its revised outlook. “Starting with today’s discussion, we will prepare to announce the measures in December through collaboration across government ministries,” he said.

Previously, the government issued an economic growth strategy at the end of each year and another for the second half of the following year in July, publishing economic forecasts twice a year. It will now increase the number of forecasts to three a year and shift to a system of issuing supplementary measures in response to changing conditions.

The meeting also discussed the direction of efforts to address polarization, plans for new initiatives under the flagship projects for the ultra-innovative economy, measures to give non-capital-region companies preferential treatment in government contracts, the proposed 12th designation of maximum petroleum prices, and plans for operating flexible fuel tax rates from December onward.

The government said it would establish a framework for addressing polarization, headed by the Deputy Prime Minister, and launch a government-wide response.

On forming a task force (TF) to address polarization, Lee stressed, “I will lead the team directly and bring together the capabilities of relevant ministries and government-funded research institutes.”

The TF will establish five working groups: one to improve the dual structure of the labor market; one to narrow gaps between industries and companies; one to narrow regional gaps; one to narrow generational gaps; and one to narrow social disparities. Each group will be led by a vice minister from the ministry in charge, with Level 1 officials and others from relevant ministries taking part.

Lee also outlined plans to “raise the public’s sense of progress by sorting identified tasks into those to be launched immediately, those involving institutional improvements and implementation next year, and those requiring prior social discussion. For key priorities, we will provide concentrated support through policy packages covering fiscal, tax, financial and regulatory improvements, create successful models and expand them.”

To address regional polarization, the government will substantially raise the ceiling for contracts requiring local joint participation from the current 8.8 billion won (less than 26.5 billion won for public institutions) to less than 30 billion won, broadening opportunities for construction companies outside the Seoul metropolitan area to participate.

Regarding the flagship projects for the ultra-innovative economy, Lee said, “We will establish the foundation for large-scale production by 2030 through localization and standards development for actuators, a key component in physical AI, and secondary batteries for humanoid robots.”

The temporary fuel tax cut, scheduled to end at the end of this month, will be extended by two months. Lee said, “With the war in the Middle East continuing and winter approaching, we will extend the fuel tax cuts on gasoline, diesel and butane, which are due to end this month, by two months through the end of January 2027 to ease the public’s fuel costs. The 12th maximum petroleum prices, which will take effect at midnight on November 14, will be announced at 6 p.m. on November 13 after a comprehensive review of international oil prices and the burden on the public.”

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