Finance ministry touts 3% growth in meetings with global credit raters

South Korea's finance ministry said Sunday that Finance Minister Lee Hyung-il met the three major global credit rating agencies and multilateral development bank chiefs in Bangkok, pointing to a semiconductor export boom as the basis for expected growth in the 3 percent range this year.

The meetings, held Oct. 16 on the sidelines of the IMF-World Bank annual meetings, covered 11 sessions, including sit-downs with Moody's, Fitch, S&P, the European Bank for Reconstruction and Development and the Central American Bank for Economic Integration, as well as bilateral talks with the United States, Switzerland, Saudi Arabia and Poland.

Lee, who is also deputy prime minister, said the semiconductor-led upswing and rising facility investment should lift full-year growth into the low 3 percent range and strengthen the country's medium- and long-term growth trajectory, the ministry said in a statement.

The agencies were said to have reaffirmed that the semiconductor and artificial intelligence boom is offsetting concerns about slower growth stemming from aging populations and conflicts in the Middle East, and that stable growth, fiscal health and external indicators are keeping the sovereign rating on an even keel.

The government outlined plans to expand future growth engines through three mega-projects and seven seed industries, along with a Korean green transition initiative. On fiscal management, it said it would build a large pool of spare resources through a future-response fund and use this year's excess tax revenue to reduce state bond issuance to keep the bond market stable.

In a separate meeting with Euroclear Group CEO Valerie Urbain, Lee thanked the clearing house for opening an integrated bond account in June 2024, which helped secure South Korea's inclusion in the World Government Bond Index, and the two sides agreed to cooperate on widening the use of government bonds as collateral and boosting won-denominated transactions.

At the EBRD, the two sides signed a memorandum of understanding to establish an AI cooperation hub in Korea and discussed expanding energy and nuclear cooperation, including on the Korean-designed small modular reactor. With CABEI, they signed an MOU to set up a Korea-CABEI AI and digital transformation center and an agreement to open a CABEI office in Korea.

"Korea is playing a leading role in the AI field," EBRD President Odile Renaud-Basso was quoted as saying, adding that she hoped cooperation with Korea would raise the bank's capabilities and expertise.