Lee hails 'historic turning point' as IMF forecasts second straight rise in Korea's potential growth rate

President Lee Jae Myung expressed confidence in the recovery of South Korea's economic fundamentals on Thursday, citing an IMF projection that the country's potential growth rate will rise for two consecutive years for the first time in four decades. He also called for thorough on-site preparations ahead of Halloween and the autumn wildfire season, saying that when it comes to public safety, "being overly cautious is 100 times better than being underprepared."

Speaking at a senior secretaries meeting at Cheong Wa Dae, Lee said the IMF had forecast that South Korea's potential growth rate would rise for two straight years, even as public expectations were building for real growth to surpass 3 percent this year and per capita income to reach $40,000. "I'm told this is the first time such a thing has happened in 40 years, since the high-growth era of the mid-1980s," he said.

Lee said the projection carried added significance given the difficult conditions under which it was made. "Unlike the period of the three lows boom back then, this outlook comes amid unfavorable conditions — high oil prices driven by the war in the Middle East and a global supply chain crisis," he said. "If this trend continues, the potential growth rate, which had fallen by nearly 1 percentage point with each change of government, will reach a historic turning point under our administration. That is truly welcome news."

He acknowledged that reversing the downward trajectory of the potential growth rate had never been easy. "I had said on several occasions that I would turn the declining potential growth rate around, but I knew it was no simple task," Lee said. "Still, thanks to the efforts of many, an upward trend is taking shape, and I am truly relieved. A rebound in the potential growth rate — the bedrock of economic fitness — is welcome news that our economy's growth foundation is becoming more solid."

However, Lee pointed to gaps in youth employment and domestic demand, calling for active government intervention. "These problems cannot be left entirely to the market," he said, urging officials to channel available fiscal resources sufficiently into expanding youth jobs, housing supply and domestic consumption. He also directed the government to prepare support measures for financially vulnerable groups, noting that interest rates were expected to rise in line with increases in the benchmark rate and global rates.

On the industrial ecosystem, Lee said that for the potential growth rate rebound to translate into qualitative improvements in the national economy, large and small companies must grow together. He called for extending the manufacturing-centered cooperation model to platforms and finance, and said the government must develop tailored cooperation plans to promote large-and-small-business partnerships in major national projects, including the three mega-projects, seven seed projects and three core social policy initiatives.

Lee issued strong directives on safety management for Halloween and the dry autumn season. "Large crowds are expected to gather in major commercial districts and public facilities ahead of Halloween next week," he said. "Thorough preparation in advance is essential. I ask that extra care be taken to ensure no safety blind spots emerge at densely crowded events with no clear organizer or an ambiguous one."

He added: "When it comes to public safety, being overly cautious is 100 times better than being underprepared. I ask that safety measures for frontline responders — including firefighters and police officers — also be established more thoroughly."