Lee Hyung-il calls for inclusive AI-driven growth; IMF chief backs Korea's policy mix

Deputy Prime Minister and Finance Minister Lee Hyung-il said the world must promote inclusive AI-driven growth through sophisticated policy design and international cooperation so that the benefits of AI can spread across the globe. He also identified responses to financial and cyber threats and the strengthening of financial resilience as key priorities.

According to the Ministry of Economy and Finance, Lee attended the International Monetary and Financial Committee (IMFC) meeting in Bangkok, Thailand, on Saturday as a representative of an IMF member country, where he met with finance ministers and central bank governors from major economies.

The IMF said at the meeting that the global economy is showing signs of recovery but still faces high uncertainty and downside risks. The fund stressed the importance of policy responses to ensure macroeconomic and financial stability, as well as structural reforms to support AI and digital transformation, and called for stronger international cooperation to address global imbalances and resolve debt problems in low-income countries.

Responding to IMF recommendations on maintaining fiscal soundness and expanding the private sector's growth potential, Lee said Korea is pursuing responsible fiscal management and structural reforms to promote growth. He said the country is also advancing three core social policies — in housing, employment and financial services for ordinary citizens — to ease polarization, which he described as essential for sustainable growth.

He also asked the IMF to provide concrete policy advice on economic polarization and the AI transition.

On the sidelines of the IMFC meeting, Lee held separate bilateral meetings with IMF Managing Director Kristalina Georgieva and First Deputy Managing Director Dan Katz. In both meetings, he highlighted Korea's active policy efforts to build a foundation for sustainable growth, including measures to ease polarization through the three core social policies, three major mega-projects and seven SEED projects.

Georgieva said the IMF had recently made a significant upward revision to its growth forecast for Korea. The fund raised its projection for Korea's economic growth rate this year from 2.6 percent to 3.3 percent — an increase of 0.7 percentage points — in its World Economic Outlook released Tuesday. It said strong external demand for semiconductors would offset the negative impact of the war in the Middle East and support Korea's growth momentum.

Georgieva also said Korea's policy mix — combining a mildly restrictive monetary policy with a neutral fiscal stance — was appropriate. She said this approach would avoid placing excessive pressure on monetary policy while allowing the government to build up reserves in its future response fund as a buffer against changing economic conditions. She added that more detailed discussions could take place at the annual consultation scheduled for November.

Lee and Georgieva also signed a letter of intent to continue Korea's participation in the IMF's Global AI Hub and its capacity development partnership. The Global AI Hub is an open platform through which international organizations and multilateral development banks integrate AI capabilities and share infrastructure and expertise to seek solutions to complex global crises.

Lee said he expects Korea's participation in the IMF's Global AI Hub to serve as a meaningful bridgehead for closing the global technology gap. He also reaffirmed Korea's commitment to continuously supporting digital capacity development in vulnerable countries, and said he hopes the signing of the letter of intent will mark a milestone in Korea-IMF cooperation for sustainable global economic growth.