Majority of Experts Give Low Ratings to Yoon’s Economic Policy, Cite Weak Domestic Demand

57.1% of economic experts gave a “B” grade or lower to the financial policy of Yoon Suk Yeol’s government. The most significant concerns for the South Korean economy this year were “weak domestic demand” and “real estate Project Financing (PF).”

In a survey conducted by Seoul Economy on January 1, targeting 35 economic experts who attended the 2024 Economic Joint Academic Conference, 20 experts rated the financial policy of Yoon Suk Yeol’s government as a B grade or lower. Among them, seven gave a “C grade or lower.” This reflects the challenging economic situation with high interest rates and inflation continuing and exports recently showing signs of recovery. Six experts gave an A grade to the financial policy of Yoon Suk Yeol’s government. Even those who refused specific answers said, “It is difficult to grade,” but added, “It’s not a situation for a high grade.”

Experts who graded B or lower criticized the lack of clear policies to overcome the crisis. One expert said, “I can’t think of a policy that deserves a good grade,” and advised, “The government needs to play a bold role in strategic technology areas where countries are pouring their policy capabilities.” Experts also called for the government’s efforts for mid-to-long-term structural reform. A professor of economics at a university in downtown Seoul pointed out, “The government has put forward labor, education, and pension reforms, but there is no clear blueprint.” A professor active in the fiscal society criticized, “There is no mid-to-long-term vision of the nation in the middle of a crisis.”

However, some argued that we should consider that the Yoon government is operating policies under extremely harsh domestic and international economic conditions. One expert explained, “Didn’t the government inherit a debt of 1,000 trillion won when he came into office?” and described, “The downturn in the semiconductor market, changes in the export environment due to US-China conflicts, and high interest rates are all external variables that our government cannot control.”

Meanwhile, when asked what the most significant risk factor for our economy this year is, weak domestic demand and confusion caused by real estate, PF ranked first with 20.3%. Other risks included “strengthening of protectionism due to the possibility of Donald Trump’s re-election as US President (14.5%),” “geopolitical risks in the Middle East and other areas (13.0%),” and “high interest rates and inflation (11.6%).”