Deputy Prime Minister and Minister of Strategy and Finance Yoo Il-ho (Photo: MOSF).

Deputy Prime Minister and Minister of Strategy and Finance Yoo Il-ho will head a Korean delegation to the 50th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB), to be held in Yokohama, Japan, from May 6 to 7.

The delegates include Gov. Lee Ju-yeol of the Bank of Korea and heads and representatives of commercial banks and other financial institutions, including Chairman Cho Yong-byoung of Shinhan Financial Group,; President Wi Sung-ho of Shinhan Bank,; Chairman Yoon Jong-kyoo of KB Financial Group and currently Kookmin Bank President,;  Chairman Kim Jung-tai of Hana Financial Group,; President Ham Young-ju of the KEB Hana Bank; Chairman Kim Yong-hwan of NongHyup Financial Group, Chairman Lee Dong-geol of Korea Development Bank (KDB),; President Lee Kwang-goo of Woori Bank; Chairman Kim Do-jin of the Industrial Bank of Korea (IBK),; Chairman & President Choi Jong-ku of the Export-Import Bank of Korea,; President Moon Chang-yong of KAMCO, and President Gwak Bum-gook of Korea Deposit Insurance Corp. (KDIC). Also participating in the event are Korea Exchange (KRX) Chairman Chung Chan-woo,; Chairman Ha Young-ku of the Korean Federation of Banks (KFB),;Chairman Hwang Young-key of the Korea Financial Investment Association(Kofia),; Chairman Lee Soo-chang of the  Korea Life Insurance Association and Chairman Kim Duk-soo of the Credit Finance Association.

Over 3,000 finance and development ministers, central bank governors, and other government officials, business leaders, investors, journalists and representatives from civil society from 67 member countries of the ADB will assemble for the 50th ADB Annual Meeting.

The 2017 Annual Meeting, to be held under the theme “Building Together the Prosperity of Asia,” will be an opportunity for delegates to reflect on the lessons from the last 50 years of Asian development, and consider how the next 50 years can better the lives of the people in the region.

The Host Country Day will take place under the themes of Plan for a Sustainable Development of Aging Asia and the 20 years of Achievements and Tasks after the Asian Financial Crisis. 

The ADB Annual Meeting will also coincide with ICT-related events, including a seminar on the direction of ICT investments. The Korea Development Institute will hold a seminar on Korean companies in the Asia-Pacific region and the economic development of Korea.

In particular, commercial bank presidents from Korea and Japan on May 8 will hold a breakfast meeting designed to make breakthroughs on soured relations between the two countries. KFB Chairman Ha proposed the meeting as part of ways to promote cooperation of both sides, and his Japanese counterpart Chairman Dakashi Oyamada of Japanese Bankers Association (JBA) accepted it. Korean and Japanese commercial bank presidents are expected to discuss ways of promoting cooperation in the financial field. The KFB and the JBA are reportedly studying an option of regulating their consultative meeting.

“This meeting is considered as a kind of ice-breaking, and continued meetings will enhance the understanding of each other,” a KFB official said. 

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. 

Ministerial Meeting on the Economy 

The deputy prime minister presided over the 7th Ministerial Meeting on the Economy on support venture startups, attracting a qualified foreign work force. Deputy Prime Minister Yoo talked about the country’s situation at the beginning of the meeting. 

The following is a summary of Deputy Prime Minister Yoo’s keynote address: The economy shows signs of improvement and employment data turned out to be better than expected. The IMF revised up the 2017 growth outlook, reflecting positive views about the Korean economy. 

Uncertainties have been eased as to the restructuring of Daewoo Shipbuilding and Marine Engineering (DSME), as creditors have reached an agreement. However, there are worries over North Korea’s nuclear threats and uncertainties as to trade issues linger. The government will keep up its level of alertness and be prepared for any possible risks.

Production and Investment Continues to Improve  

The Korean economy has shown recovery signs as consumption rebounded and production and investment continued to improve backed by a five-month growth in exports. The economy added 371,000 jobs year-on-year in February 2017, going up from 243,000 a year ago, as the construction sector employment expanded at a faster rate and the downturn in the manufacturing sector stabilized.

Consumer prices remained unchanged month-on-month in March 2017, but increased 2.2 percent year-on-year as the index in March 2016 fell 0.3 percent compared with the previous month.

Mining and manufacturing production fell in February (up 2.9% on year→ down 3.4%, m-o-m) due to a high base effect from the previous month and a decrease in semiconductor production, although the combined index for January and February rose 1.9 percent compared with the previous year. Service output rose 0.1 percent month-on-month in February, going up for four consecutive months, backed by strong wholesale & retail and financial & insurance services.

Retail sales surged in February down 2% on year → up 3.2%, m-o-m) after falling for three months, as sales of durable, semi-durable and nondurable goods all increased.

Facility investment fell in February (p 1.8% on year→ down 8.9%, m-o-m) although the combined index for January and February went up 3.0 percent compared with the previous year. Construction investment surged 7.8 percent month-on-month backed by private sector residential housing construction and SOC investment.

In February, the cyclical indicator of the coincident composite index rose 0.1 points from the previous month backed by a growth in the service sector production as well as the value of construction completed. The cyclical indicator of the leading composite index improved 0.2 points as domestic shipments of machinery and construction orders increased.

Exports in March (up 20.2% on year → up 13.7%, y-o-y) maintained a two-digit growth rate for the third consecutive month despite less days worked (down 2 days, m-o-m), backed by major export items, such as petroleum products and semiconductors.

Stock prices rose in March backed by foreign purchases of Korean shares and as the dollar depreciated amid global expectations of Fed’s gradual rate hikes since its March meeting. The dollar-won exchange rate fell.

Both housing prices (up 0.01% on year → up 0.06%, m-o-m) and Jeonse (lump-sum deposits with no monthly payments) prices (up 0.03% on year→ up 0.07%, m-o-m) rose in March as demand increased due to the spring moving season.

Although export growth has continued and economic sentiment has improved, there remain internal and external risks, such as issues concerning trade, restructuring of ailing industries and North Korea’s military provocation.

The government will continue to focus on recovery measures and boosting the real economy by successfully implementing expansionary macroeconomic policies and fostering consumption, investment and exports, while effectively managing the risk factors at home and abroad.