KDI has released its flagship Economic Outlook 2025 (2nd Half). The Financial Sector chapter, led by Professor Seohyun Lee, provides an assessment of Korea’s financial stability outlook and outlines key policy recommendations.

Key Highlights

1. South Korea’s financial system remains broadly stable despite heightened trade-related uncertainty.

2. However, volatility in exchange rates and equity markets may rise amid global trade tensions and uncertainty over investment financing linked to the trade agreement with the U.S.

3. Macroprudential policy should shift from short-term loan demand management toward strengthening credit risk management capacity within financial institutions.

https://www.kdi.re.kr/eng/research/economy?pub_no=18914