Seoul: The finance ministry of South Korea will initiate the creation of a sovereign wealth fund and a special fund designed for strategic export support next year. This move is aimed at bolstering the economy, as announced by Finance Minister Koo Yun-cheol during a report to President Lee Jae Myung.
According to Yonhap News Agency, Minister Koo outlined that to raise the potential growth rate of the Korean economy and address economic polarization, a comprehensive economic growth strategy for 2026 will be developed by the end of January. This strategy will focus on six key areas, with the establishment of a sovereign wealth fund in the first half of the year drawing inspiration from similar initiatives in Singapore and Australia.
Additionally, the ministry plans to manage state-owned properties, valued at approximately 1,300 trillion won (US$882.3 billion), more effectively. This management aims to expand public housing and stimulate the growth of strategic sectors such as artificial intelligence (AI) and renewable energy.
As part of Korea's investment strategy in the United States, following a bilateral tariff agreement reached in late October, the government will form a strategic investment corporation and a special fund to identify "commercially rational" investment opportunities. Furthermore, a distinct fund will be established to support exports and overseas ventures of local companies strategically.
The growth strategy also emphasizes fostering an AI transition, particularly focusing on physical AI. Minister Koo stated that the government aims to achieve at least 1.8 percent economic growth through proactive fiscal policies and measures that encourage consumption, investment, and exports. This will be coupled with a thorough management system for monitoring foreign exchange and real estate markets.
In response to the business community's request for easing the separation between banking and industry, Koo mentioned that his ministry would consider special regulatory exemptions for holding companies and explore ways to rationalize economy-related laws. On fiscal and tax policy, he reported plans for comprehensive expenditure restructuring to better allocate assets and a tax system designed to channel capital into productive sectors.