Financial members of the BOK “May appear semiconductor optical illusions this year”

Input 2021.02.02 19:00

This year’s first bank statement, “You need to consider growth momentum excluding semiconductors”
Concerns about asset surges all at once… “May deepen inequality”

At this year’s first meeting on the direction of monetary policy, the Monetary Committees were concerned that the semiconductor optical illusion could appear in the Korean economy. While employment and consumption are still sluggish, only semiconductors alone can be seen as strong, leading to a rebound in the overall economy. They also expressed concern at the same time about the soaring asset price, which is widening the gap with the real economy.

In the minutes of the Financial Services Commission released by the Bank of Korea on the 2nd (the first round of 2021), Finance Commissioner A said, “This year, as our economy’s dependence on the semiconductor industry expands again, a so-called semiconductor illusion may appear.”

In the meantime, “Even though the economics experienced by economic actors are still sluggish due to worsening employment and delayed recovery of the face-to-face service industry, the semiconductor economy has been strong. It can be perceived as “.

Commissioner B said, “The domestic economy is showing a recovery trend centered on exports thanks to the improvement of the semiconductor economy,” he said. “However, this kind of semiconductor-led growth can bring about a kind of illusion about the economic situation.” He added, “It is necessary to consider growth momentum excluding semiconductors.”

Commissioner C also emphasized, “When looking at the manufacturing industry in Korea, the semiconductor industry and other industries have shown markedly different patterns,” he said. “It is necessary to look at the trend of the economy excluding semiconductors.” “In this context, it seems necessary to calculate the average utilization rate of the manufacturing industry excluding the semiconductor industry.”

These bank members also expressed concern about the situation in which the gap with the real economy is deepening due to the recent surge in asset prices such as stock prices and real estate. Criticism continued to comment that if this situation persists, easing monetary policy will lead to economic inequality.

Commissioner A said, “Recently, stock prices and housing prices have risen sharply, and we need to keep an eye on how easing monetary policy affects this process.”

He added, “As asset prices are rising faster than the recovery rate of the real economy, there are claims that easing monetary policy will intensify inequality.”

Commissioner D introduced an editorial in the foreign media that the Fed’s easing monetary policy has caused a surge in stock prices, and a small number of high-income groups are receiving intensive benefits. “The Fed seems to be taking seriously the issue alleged here. “I said.

“However, it is understood that the US Fed maintains the position that it is desirable to approach this inequality problem through fiscal policy that allows selective support rather than indiscriminate monetary policy.”

Commissioner E presented the view that “in estimating the effect of monetary policy on real and asset prices, it may be more appropriate to analyze the change in liquidity rather than the standard interest rate level.”