Deputy Prime Minister and Minister Hong Nam-ki of the Ministry of Economy and Finance (MOEF). (Photo: MOEF)

The Asian Development Bank (ADB) will hold the 54th Annual Meeting of the Board of Governors in a virtual format from May 3 to May 5, with a focus on deepening collaboration for a resilient and green recovery from the COVID-19 pandemic.

“The pandemic has had a significant impact in peoples’ lives throughout the world and in our region. We have worked closely with our developing members to support their response to COVID-19.

As the focus shifts to the complex task of shaping the region’s recovery, the Annual Meeting provides an excellent opportunity to develop approaches to balancing response efforts, including vaccine access, and support for a green, resilient, and inclusive recovery,” said ADB Secretary Muhammad Ehsan Khan. “Working together, in a spirit of collaboration and cooperation, we will be able to surmount the challenges ahead.”

Annual Meeting seminars featuring government, industry, academic, and other leaders will explore a range of topics including shaping Asia’s economic reset; regional cooperation for a resilient future; the road to the United Nations Climate Change Conference (COP 26); venture capital and recovery; a woman-focused recovery for a more inclusive future; and the launch of the Asia Pacific Tax Hub, among others. The agenda also feature a set of sessions with civil society organizations.

Finance ministers and central bank governors of the Association of Southeast Asian Nations (ASEAN) and their counterparts from the People’s Republic of China, Japan, and the Republic of Korea are expected to meet virtually on sidelines of the meeting.

ADB’s Annual Meetings are attended by ADB Governors, who are mostly finance ministers, central bankers, and other high-ranking ministers of ADB members, as well as participants from the international development community, private sector, civil society, academia, media, and other stakeholders.

DPM Hong Attends G20 Finance Ministers’ Meeting to Discuss Global Economic Recovery

Deputy Prime Minister Hong Nam-ki attended the 2nd G20 Finance Ministers and Central Bank of Governors Meeting of 2021 held virtually on April 7.

At the meeting, Finance Ministers, Central Bank Governors, and representatives from IMF, OECD, World Bank, discussed various issues including efforts to support the most vulnerable countries, and advancing in international taxation and financial sector related issues.

As the co-chair of G20, Hong showed appreciation to those who pushed forward with the final extension of the Debt Service Suspension Initiative by 6 months through the end of December 2021 and the allocation of Special Drawing Rights worth $650 billion, which can help enhance liquidity and mobilize more resources in vulnerable countries. He also urged G20 member countries to actively engage in implementation process as well.

Hong mentioned the importance of cooperation on macro-economic policies among countries during a crisis, and making sure that financial market volatility doesn’t lead to the hampering of the recovery. He also emphasized on the need to take IMF advice on capital flows, which can help with capital flow volatility.

Lastly, he stated the need to prepare for the post COVID-19 era by working on mid-to-long term tasks, including restoring multilateral trading systems, promoting the transition to a digital and low carbon economy, and securing mid-to-long term financial soundness.

Korea Joins Coalition of Finance Ministers for Climate Action

DPM Hong attended the April 2021 Minister-Level Meeting of the Coalition of Finance Ministers for Climate Action on April 6 as Korea joins the partnership in April 2021. At the meeting, Hong emphasized three key policy agenda for finance ministers to pursue inclusive and sustainable growth in the post-pandemic era.

He called for support and participation in P4G1 Seoul Summit, which Korea will host May 30-31 under the theme of ‘Green Recovery and 2050 Carbon Neutrality’.

Hong urged the participation of developing countries in the fight against climate change. He also proposed to share Korea’s experience by supporting developing countries’ transition to a low carbon economy.

Hong noted the importance of global cooperation in the finance sector to establish win-win policies for all countries as climate change responses have considerable effect on other countries.

Govt. to Work to Keep Inflation in Check

Deputy Prime Minister Hong Nam-ki presided over the 33rd Meeting of the Central Economic Response Headquarters on April 7, which is also the 11th Ministerial Meeting on the Korean New Deal.

Hong discussed plans to respond to looming inflation, as well as Korean New Deal issues, such as making the country’s industrial complexes smart and green, and frameworks for smart shipping.

The deputy prime minister talked about the IMF World Economic Outlook report released the previous day at the beginning of the meeting.

According to the IMF report released April 6, the global economy is projected to get out of the downturn and jump to 6 percent growth this year, the outlook for the Korean economy revised up to 3.6 percent growth, a 0.5 percentage point increase from the January outlook of 3.1 percent.

The IMF predicting divergent recovery in global economies, Korea is placed among a few countries expected to rebound to the pre-pandemic level in 2021. The country is also expected to be one of the major beneficiaries of strong global recovery, its exports and investment rising in line with the US economy picking up.

DPM Hong sad, “Consumer prices rose 1.5 percent in March due to rising international oil and grain prices, as well as limited supplies of farm products.” “Although consumer prices will rarely rise beyond two percent this year, we will work in advance to keep them under control as inflation could restrain recovery, “ he said.

The government will work to address the problems of industrial complexes, energy-devouring and environmentally harmful, by making them smarter and greener.

Consolidated Fiscal Account a 71.2 Trillion won Deficit in 2020

The consolidated fiscal account posted a deficit of 71.2 trillion won (3.7 percentage to GDP), an increase of 59.2 trillion won (3.1 percentage points to GDP) from a year ago amid efforts to overcome the pandemic. Excluding social security funds (1), the fiscal account registered a deficit of 112.0 trillion won (5.8 percent to GDP), deficits rising 57.5 trillion won (3 percentage points to GDP) compared with the previous year.

Consumer Price Index in March

The Consumer Price Index was 107.16 (2015=100) in March 2021. The index increased 0.1 percent from the preceding month and rose 1.5 percent from the same month of the previous year. The index, excluding food and energy, was 106.41 in March 2021.

The index increased 0.1 percent from the preceding month and rose 0.6 percent from the same month of the previous year.

The index for Housing, water, electricity, gas and other fuels; Health; Transport; Communication; Education; Restaurants and hotels; and Miscellaneous goods and services increased 0.3 percent, 0.1 percent, 1.3 percent, 0.1 percent, 0.2 percent, 0.1 percent, and 0.2 percent, respectively, from the preceding month.

The index for Food and non-alcoholic beverages; Alcoholic beverages and tobacco; Clothing and footwear; Furnishings, household equipment & routine maintenance; and Recreation and culture decreased 0.3 percent, 0.1 percent, 0.3 percent, 0.7 percent, and 0.1 percent, respectively, from the preceding month.

Monthly Industrial Statistics in February

The Index for all industry production in February increased by 2.1 percent from the previous month. The Index for Mining & Manufacturing industries, Service industry and Construction industry went up from the previous month.

The Index of all industry production in February increased by 0.4 percent from the same period of the previous year.

The Index of Mining & Manufacturing industries and Service industry went up from the same period of the previous year.

The Manufacturing Production Index in February increased by 4.9 percent from the previous month and 1 percent from the same period of the previous year.

The Manufacturing Shipment Index in February increased by 2.2 percent from the previous month and 1.3 percent from the same period of the previous year. The Manufacturing Inventory Index in February increased by 0.4 percent from the previous month but decreased by 2.6 percent from the same period of the previous year.

The Production Capacity Index in February decreased by 0.3 percent from the previous month but increased by 1.2 percent from the same period of the previous year.

The Index of Capacity Utilization Rate in February increased by 5.8 percent from the previous month but decreased by 1.8 percent from the same period of the previous year. The Manufacturing Average Capacity Utilization Rate in February marked 77.4 percent, which increased by 4.2 percentage points from the previous month.

The Index of Services in February increased by 1.1 percent from the previous month and 0.7 percent from the same period of the previous year.

The Retail Sales Index in February decreased by 0.8 percent from the previous month but increased by 8.4 percent from the same period of the previous year.

The Equipment Investment Index in February decreased by 2.5 percent from the previous month but increased by 7.0 percent from the same period of the previous year.