Ministry of Economy and Finance

On May 8, Acting Minister of Economy and Finance Kim Beomseok convened a Meeting on Macroeconomic and Financial Issues at the Korea Federation of Banks building. The meeting was held to assess the impact of the U.S. Federal Open Market Committee’s (FOMC) decision to hold interest rates steady – announced earlier this morning (KST) – on domestic and global financial and foreign exchange (FX) markets, and to discuss future plans.   * Participants: The Chairman of the Financial Services Commission, the Chairman of the Financial Supervisory Service, and the Senior Deputy Governor of the Bank of Korea.   Last night, the U.S. Federal Reserve (Fed) left its policy rate unchanged for the third consecutive time during the FOMC meeting, maintaining the upper bound at 4.5%. In its statement, the Fed noted that economic uncertainty had increased and highlighted elevated risks to employment and inflation in the United States.   At the press conference, Chair Powell stated, “We think that leaves us in a good place to wait and see. We don’t think we need to be in a hurry. We think we can be patient. We are going to be watching the data.”   In the early hours of today, global financial markets remained generally stable. While attention was drawn to the Fed’s recognition of heightened risks to employment and inflation, the decision to keep rates unchanged and Chair Powell’s cautious stance on the economic outlook were broadly in line with market expectations.   At today’s meeting, participants shared the view that although the domestic stock and bond markets have maintained a steady trajectory, lingering external uncertainties – such as concerns over a slowdown in the U.S. economy, U.S.-China tensions, and ongoing tariff negotiations – continue to pose risks; the sharp fluctuations in some Asian currencies late last week had added to the volatility in FX markets. They also agreed that it is essential to maintain a heightened sense of vigilance and continue 24-hour monitoring of the financial and FX markets given that major events in international financial markets such as the first official trade negotiations between the U.S. and China are scheduled to take place.   Furthermore, Acting Minister Kim stated that, given the continued internal and external uncertainties – including major countries’ trade negotiations and rising geopolitical tensions – the government will convene the Meeting on Macroeconomic and Financial Issues on a weekly basis to closely monitor developments in the financial and FX markets and ensure the stable management of the economy. Please refer to the attached files. 

The Minister of Economy and Finance (MOEF), with Deputy Minister for International Affairs Choi Ji-young serving as head delegate, attended the Opening Session and Governors’ Business Session (Board of Governors Meeting) of the 58th Annual Meeting of the Asian Development Bank (ADB), held on May 5 in Milan, Italy.   Held under the theme of “Sharing Experience, Building Tomorrow”, this year’s ADB Annual Meeting brought together government delegations from all 69 ADB member countries (49 regional and 20 non-regional), including the Governor of the Bank of Italy – the chair country – as well as the finance ministers of Japan, China, and India. Representatives from international financial institutions and the private sector also participated.   During the Governor’s Business Session, the ADB approved the 2024 Annual Report, financial statements, and the 2025 budget. Governors from member countries also exchanged views on avenues for cooperation to promote sustainable development in the region and on the future role of the ADB. In particular, newly appointed ADB President Masato Kanda outlined the Bank’s key priorities, including responding to climate change, strengthening food security, and supporting digital transformation. He also emphasized the need to scale up ADB’s financial resources and enhance institutional capacity to effectively achieve these objectives.   In his statement at the Governor’s Meeting, Deputy Minister Choi extended congratulations on the inauguration of the new ADB President and expressed the Korean government’s support for ADB’s reform agenda. He also proposed three strategic directions for the Bank’s future development to cope with evolving global economic and development challenges.   First, he called on the ADB to continue scaling up its support for Global Public Goods, which constitute the Bank’s core mission. In this regard, he announced its contribution of $100 million to the ADB’s IF-CAP*, aimed at supporting the ADB’s mission. In addition, he added that Korea has supported ADB’s projects related to critical minerals technologies and policy advisory and plans to establish the K-Hub** in Korea to enhance climate capacity in developing countries.   * Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP): A facility under which donor countries provide guarantees for ADB’s existing loans, thereby enhancing the Bank’s lending capacity to mobilize additional resources for new climate-related projects.   ** ADB-Korea Climate Technology Hub (K-Hub): A new ADB office to be established in Korea, which will support capacity-building in developing countries and serve as a regional platform for climate technology and expert networks.     Second, he underscored the importance of ADB’s continued efforts to bolster performance management. He explained that a systematic approach to performance monitoring serves as the foundation for shoring up development effectiveness and securing stable financial resources; in this context, he also stated the Korean government would also strengthen performance management for the trust funds and co-financing projects in which it participates.   Last but not least, he called on the ADB to expand its partnerships beyond the public sector to include the private sector; in light of the evolving global development landscape, leveraging private sector resources and expertise has become increasingly important. He highlighted the importance of ADB taking a leading role in establishing effective collaboration mechanisms and appropriate risk-sharing frameworks between the public and private sectors.   Going forward, the Korean government plans to further step up its collaboration with ADB and actively contribute to efforts aimed at promoting sustainable and inclusive growth in the Asia-Pacific region. Please refer to the attached files. 

The consumer price index (CPI) in April 2025 rose by 2.1% year-on-year, the same rate as in March. While the decline in agricultural product prices deepened and petroleum products shifted to a downward trend, the overall index was offset by larger increases in prices for livestock and fisheries products, processed foods, and personal services. Core inflation, which reflects the underlying trend by excluding volatile food and energy prices, rose by 2.1% compared to the same month of the previous year (1.9% in March). CPI for living necessities, which are composed of items with a significant share of household spending, saw a growth of 2.4% year-on-year, unchanged from March. Meanwhile, CPI for fresh food fell further to -1.9% compared to the previous year (-1.3% in March), as vegetable prices turned downward.                                                                               (%) 2024 2025 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr y-o-y 2.9 2.7 2.4 2.6 2.0 1.6 1.3 1.5 1.9 2.2 2.0 2.1 2.1 m-o-m 0.1 0.1 -0.2 0.3 0.4 0.1 0.0 -0.3 0.4 0.7 0.3 0.2 0.1                                                                                (y-o-y, %) 2024 2025 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr CPI excluding food and energy prices 2.3 2.2 2.2 2.2 2.1 2.0 1.8 1.9 1.8 1.9 1.8 1.9 2.1 CPI excluding agricultural product and petroleum prices 2.3 2.0 2.0 2.1 1.9 1.8 1.7 1.8 1.8 2.0 1.9 2.1 2.4                                                                              (y-o-y, %) 2024 2025 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr CPI for living necessities 3.6 3.1 2.8 3.0 2.1 1.5 1.2 1.6 2.2 2.5 2.6 2.4 2.4 While recent consumer price index has remained close to the inflation target of 2.0%, the government will make its utmost efforts to stabilize perceived inflation through close inter-ministerial coordination, given continued uncertainties such as weather conditions. In particular, the government will closely monitor supply, price fluctuations, and distribution conditions of key daily essentials – such as agricultural, livestock, and fishery products as well as petroleum products – and will promptly implement necessary response measures when required. Please refer to the attached files.