Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol will participate in the 2025 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG), slated for Oct. 13 through Oct. 18, in the IMF and World Bank Group headquarters, in Washington DC.
Deputy Prime Minister Koo will lead a Korean delegation to the annual meetings.
The delegation includes the governor of the Bank of Korea and heads and representatives of commercial banks, including Shinhan Financial Group, KB Kookmin Financial Group, Hana Financial Group, NH Financial Group, Woori Bank, Korea Development Bank, IBK, and Korea Eximbank, as well as representatives of other financial institutions and the financial industry, including the Korea Financial Investment Association.
The annual meetings of the International Monetary Fund (IMF) and the Board of Governors of the World Bank Group (WBG) will bring together central bankers, ministers of finance and development, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.
Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial system.
Gov’t Promises Response to Global Uncertainties
Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol convened an Extended Meeting on Macroeconomic and Financial Stability with related institutions on Sept. 18 at the Korea Federation of Banks building.
The meeting reviewed global financial market developments and assessed the potential impacts on Korea’s financial and foreign exchange (FX) markets following the U.S. Federal Open Market Committee (FOMC)’s decision to cut interest rates, and discussed future plans.
The following are key messages of DPM Koo’s remarks. At the FOMC meeting overnight, the U.S. Federal Reserve decided to lower the policy rate by 25bp for the first time in about nine months, bringing the upper bound down from 4.50% to 4.25%. Along with the rate cut, the Fed also revised its outlook for future interest rates lower.
In terms of the economic outlook, the Fed raised its inflation forecast while presenting an improved outlook for growth and employment compared to previous projections. The wide divergence of views among FOMC members further illustrated uncertainties surrounding the economy and the direction of future interest rates.
At the press conference, Chair Jerome Powell noted that downside risks to employment have increased, in parallel with the need to closely monitor the impact of tariffs on inflation. He remarked that the situation is challenging, as both of the Fed’s dual mandates — price stability and maximum employment — face risk factors.
Early this morning, global financial markets largely viewed the interest rate cut as in-line with market expectations. At the same time, the markets paid close attention to Chair Powell’s remarks on future uncertainties, resulting in a mixed market performance.
Meanwhile, domestic financial markets have maintained a stable trend.
The KOSPI index has continued to reach record highs in September, supported by net purchases from foreign investors.
The KRW/USD exchange rate edged lower, influenced in part by increased foreign investment in the stock market, while corporate bond issuance and other financing conditions remain smooth.
However, global uncertainties, including U.S. tariff policies and economic indicators, persist. Under these circumstances, the government will closely monitor key risk factors and respond promptly if necessary.
The government, together with the Bank of Korea, the Financial Supervisory Service, and other relevant institutions, will continue to maintain close and frequent communication to ensure that the management of the macroeconomic and financial markets is conducted with utmost diligence and without any lapse.
Current Economic Situation in September 2025
In July 2025, industrial production, service production, retail sales and facilities investment increased, while construction investment declined.
Overall industrial production rose (+0.3% m-o-m, +1.9% y-o-y) as production moved up in the industrial (+0.3% m-o-m, +5.0% y-o-y), services (+0.2% m-o-m, +2.1% y-o-y) sectors, while production in the construction sector moved down (-1.0% m-o-m, -14.2% y-o-y).
Retail sales (+2.5% m-o-m, +2.4% y-o-y) and facilities investment (+7.9% m-o-m, -5.4% y-o-y) went up.
Exports in August 2025 increased by 1.3% year-on-year driven by robust semiconductor industry performance and average daily exports went up by 5.8% in August compared to the same month of last year.
The consumer sentiment index (CSI) in August rose by 0.6 points month-on-month to 111.4. The composite business sentiment index (CBSI) increased by 1.0 points to 91.0 and the CBSI outlook for August climbed by 3.4 points to 91.8.
The cyclical indicator of the coincident composite index for July fell by 0.1 points and the cyclical indicator of the leading composite index moved up by 0.5 points.
In August, the number of employed persons increased and consumer prices rose at a slower pace.
The number of employed people grew by 166,000 compared to the same month last year, and the unemployment rate stood at 2.0%, up by 0.1%p from a year ago.
The year-on-year consumer price index (CPI) climbed by 1.7%, driven by the decline in petroleum and public service prices. The CPI excluding food and energy grew by 1.3% year-on-year.
In August, stock prices went down, Korean Treasury Bond yields dropped, and the Korean won weakened. In July, both housing prices (+0.12%, m-o-m) and Jeonse prices rose (+0.04%, m-o-m).
Recently, the Korean economy has continued to face challenges such as delayed recovery in construction investment, employment difficulties concentrated in vulnerable sectors, and concerns over export slowdowns due to U.S. tariff measures.
Nonetheless, positive signs for economic recovery are strengthening, with consumption rising on the back of policy support.
The global economy is facing sustained volatility in global financial markets and concerns over slower trade and growth, primarily owing to the worsening trade conditions driven by tariff measures imposed by major economies.
Against this backdrop, the government will go all out to stimulate domestic demand by swiftly implementing the supplementary budget, distributing livelihood recovery consumption coupons, and organizing large-scale discount events.
At the same time, it will also make every effort to mitigate trade risks, including providing support for Korean companies affected by U.S. tariffs.
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