Yoon hosts luncheon to chew over macro economy, household debt

President Yoon Suk Yeol met with financial authorities on Friday to review the macro economy.

President Yoon Suk Yeol speaks at the presidential office in Yongsan in central Seoul on Aug. 25. [NEWS1]

President Yoon Suk Yeol met with financial authorities on Friday to review the macro economy.

Discussions took place at a luncheon attended by Yoon, Finance Minister Choo Kyung-ho and Bank of Korea Gov. Rhee Chang-yong, held at the presidential office in Yongsan in central Seoul.

Discussions included the general economic and financial situation of the global economy, including rates in the United States, risks in China's property market and their impacts on the Korean economy, according to the presidential office. They agreed on the expanding uncertainties of the global economy and financial markets, pointing to the need for close monitoring. They added that Korea should search for opportunities from the structural changes of the global economy, like climate change.

"The government should focus on making a fair and efficient market based on a stabilized market," said Yoon in a statement. "The government and the market experts will closely communicate and cooperate to achieve that."

Choo and Rhee last met at the parliamentary session on Tuesday. Rhee has repeatedly noted the need to reduce the debt.

“Household debt grew faster than we had expected over the past two months,” Rhee said at a press conference held in central Seoul on Thursday. “The debt may grow for a couple more months due to a time lag. The bank and the financial authorities agree on the need to gradually reduce household debt through microeconomic measures to make sure the household debt to GDP ratio doesn’t grow.”

Choo agreed with the stance, saying that “household debt is a very crucial factor in measuring the soundness of the macro economy,” on Tuesday. He pointed at last year’s government as a primary reason for the rapid growth of the debt.

Korea’s total household credit, which refers to credit purchases and loans to households by financial institutions, stood at 1,862.8 trillion won ($1.4 billion) at the end of June, up 0.5 percent from three months earlier. It was the fastest percentage gain since the fourth quarter of 2021.

Household debt accounted for 105 percent of the country’s gross domestic product at the end of 2021 from 87 percent in 2016.

Yoon has held similar meetings with finance leaders at times of market uncertainties, including in May last year when he was inaugurated as the president.

BY JIN MIN-JI [jn.minji@joongang.co.kr]