Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, second from right, speaks as he presides over a meeting of ministry officials at Government Complex Sejong, Monday. Yonhap
President Yoon Suk Yeol's economic policy team is facing growing criticism as Korea's bleak economic outlook persists, now that Yoon has reached the halfway point of his single, five-year term.
Critics are pointing fingers at the team led by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, as many Koreans have yet to experience the promised trickle-down benefits of corporate sector-driven economic growth under the Yoon administration. Additionally, Korea's stock market has been one of the worst performers globally this year.
"The country is nowhere near achieving market-driven economic growth, with momentum weakening steadily," said Jung Ho-chul of the Citizens' Coalition for Economic Justice (CCEJ), a civic activist group. "The economic policy team should be held accountable for failing to deliver on their promises."
He said multiple financial institutions in Korea and abroad have cited heightened downside risks and revised down the country's growth forecast for both 2024 and 2025.
In particular, the International Monetary Fund (IMF) downgraded its growth forecast for Korea shortly after releasing its global economic outlook update on Oct. 22.
On Nov. 20, the IMF revised its growth projections for Korea, lowering its estimate from 2.5 percent to 2.2 percent for 2024, and from 2.2 percent to 2 percent for 2025.
An economist at a private think tank, speaking on the condition of anonymity, assessed that the economic policy team "got off on the wrong foot" by prioritizing a reduction in the tax burden for corporations.
The policy aims to stimulate corporate investments, which, in turn, are expected to boost returns and eventually increase tax revenues in the long term. This, according to proponents, would help improve the government's fiscal health and pave the way for market-driven economic growth.
However, the policy backfired, and the government is now grappling with a significant tax revenue shortfall, which reached a record 56.4 trillion won ($40.31 billion) in 2023. For this year, the shortfall is estimated to be around 30 trillion won.
"Under the circumstances, it's not surprising that the economic policy team remains helpless in the face of weakened private spending, high living costs, and other burdens on public livelihoods," the economist said.
He even called for a reshuffling of the team, arguing that it is composed mainly of financial bureaucrats who "are too accustomed to a strict, top-down hierarchy."
Among the team members are Senior Presidential Secretary for Economic Affairs Park Chun-seop and Financial Services Commission Chairman Kim Byoung-hwan, both former finance ministry officials.
Sources familiar with the ruling People Power Party (PPP) said that several party lawmakers are concerned about the economic policy team's performance and believe a reshuffle is necessary.
"A possible suggestion they came up with was to hire a heavyweight politician with expertise in economic issues or a seasoned entrepreneur," a source said.
However, it remains uncertain whether experts from the private sector would be willing to join the economic policy team, as they would be required to disclose their wealth and other sensitive information due to background checks for transparency.