Finance Minister Park Hong-keun and Bank of Korea Governor Shin Hyun-song shake hands during an official meeting at the Bank of Korea headquarters on the 14th. Photo courtesy of the Bank of Korea.
Park Hong-keun, Minister of Planning and Budget, and Hyun Song Shin, Governor of the Bank of Korea, held an official meeting at the central bank’s headquarters on Tuesday to discuss ways to strengthen coordination between fiscal and monetary policy. It marks the first official meeting between the head of the budget ministry and the BOK governor, including during the former Ministry of Planning and Budget era from 1999 to 2008.
In his opening remarks, Park said, “This is a critical time for cooperation between the Ministry of Planning and Budget, which designs the nation’s future strategy, and the Bank of Korea, which leads macroeconomic stability.” He called for the two institutions to work in harmony on fiscal and monetary policy while actively addressing structural challenges and expanding future growth potential.
Shin said, “The complex challenges and structural problems facing our economy cannot be solved by the efforts of any single institution alone.” He added that the BOK would continue its policy operations for price and financial stability while also pursuing research and policy recommendations to expand growth potential.
The two sides shared the view that while exports are driving a rebound in growth, uncertainties related to the Middle East conflict persist, and inflationary pressures from high oil prices and hardships in vulnerable sectors continue. They agreed on the need to concentrate policy capacity on stabilizing people’s livelihoods, including price stability and support for vulnerable sectors.
Park introduced plans to establish a mid- to long-term national development strategy to overcome five structural challenges: the AI transition, demographic change, the climate crisis, polarization, and regional extinction. He requested close cooperation from the BOK. Shin responded that since structural issues are an important factor affecting mid- to long-term monetary policy conditions, the BOK would actively contribute based on its research and analytical capabilities.
The two institutions agreed to regularly share their views on economic conditions and key issues and to continue mutual cooperation following the meeting. The strengthened communication channel between the two policy authorities is seen as meaningful at a time when slowing growth potential and expanding fiscal burdens are occurring simultaneously.
Before the meeting, Park presented Shin with a bonsai pine tree. “Our names each contain the Chinese characters for pine (松) and root (根),” Park said. “Just as the roots and trunk of a pine tree cannot touch each other yet need one another, let the two institutions maintain an unchanging cooperative relationship.”