South Korea plans 'Mega Special Zone Act' to drive economic growth

South Korea's ruling party and government are prioritizing economic growth by pushing for the enactment of a "Mega Special Zone Act" by the end of the year. This legislation aims to support three key "mega-projects": semiconductors, data centers, and physical AI, alongside strengthening regional development engines.

The government plans to accelerate infrastructure investment, while the ruling party will focus on swift legislative action. Han Jeong-ae, chair of the Democratic Party's policy committee, stated that the party requested comprehensive policy tools, including fiscal, tax, and public procurement measures, to build a strong regional growth foundation. They also urged bold and rapid investment in infrastructure and living conditions to retain talent.

A significant point of discussion was the energy supply for these large-scale projects. With the 12th Basic Plan for Electricity Supply and Demand already established, adjustments are expected. Minister of Environment, Climate and Energy Kim Seong-hwan indicated that the plan would be revised. The government is considering new nuclear power plant construction to supplement renewable energy and energy storage systems, ensuring a stable power supply.

Furthermore, the government and party addressed economic stabilization amidst global challenges. They committed to thorough macroeconomic risk management, particularly concerning high inflation, interest rates, and exchange rates, often referred to as the "triple high" risks. Measures to build a robust supply chain through strategic economic cooperation and tailored responses were also discussed.

In housing, the ruling party emphasized the need to expand housing supply to stabilize the market, particularly for young people and first-time homebuyers. A real estate-related discussion is scheduled, after which the government is expected to submit tax reform proposals and housing supply measures to the National Assembly. The party also vowed to actively address widening economic disparities, aiming to overcome "K-shaped" polarization through enhanced support for small and medium-sized enterprises and vulnerable populations, alongside a shift towards productive finance and strategic fiscal management.