South Korean deputy finance minister dismisses stock market bubble fears, citing need for innovation

South Korean Deputy Prime Minister Koo Yun-cheol has pushed back against claims of a bubble in the nation's stock market, arguing that such fears arise when innovation efforts falter. In a YouTube interview, Koo stated that the government's upcoming second-half economic growth strategy will focus on "structural reform and boosting potential growth."

“

A bubble is a concern that arises when innovation efforts are not made.

He outlined a vision for an "ultra-innovative economy," emphasizing directions such as "AI transformation, development of ultra-innovative technology items, and talent cultivation." Koo believes that if these "content-driven efforts" are made, the market will accurately evaluate South Korea's stock market.

While avoiding specific figures for the year's growth forecast, which is due in June, Koo hinted at a possible upward revision. He referenced projections of 3% real growth and up to 10% nominal growth, but cautioned that outcomes depend on "Middle East variables and the semiconductor market cycle."

“

If these content-driven efforts are made, the market will judge our stock market.

Regarding tax revenue, Koo acknowledged that "excess tax revenue is obvious" due to improvements in the semiconductor industry. However, he noted that a final assessment would require waiting for corporate tax prepayments in August. He suggested that any additional revenue should be reinvested in future industries and used to address structural economic challenges like polarization.

“

Excess tax revenue is obvious.