Na Kyung-won criticizes South Korean fiscal-monetary policy conflict

Na Kyung-won, a member of the People Power Party, has criticized the South Korean government for a perceived conflict between monetary and fiscal policies. As the Bank of Korea maintains a base interest rate of 3.0% to combat inflation, the government is reportedly planning a massive budget expansion for next year, potentially reaching approximately 820 trillion won.

Na described the situation as a “deformed collision” where one side is applying the brakes while the other is pressing the accelerator. She argued that the large-scale fiscal expansion could stimulate demand, drive up inflation, and force the central bank to maintain high interest rates for longer. This, she warned, would disproportionately harm vulnerable groups, including young people and small business owners struggling with high debt and interest payments.

Furthermore, Na raised concerns regarding national debt, noting that total liabilities, including pension obligations, have exceeded 2,770 trillion won. She urged the government to prioritize fiscal soundness and debt repayment rather than using excess tax revenue from the semiconductor boom for universal cash handouts, calling instead for targeted support for those most affected by high costs.