Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, center, speaks during a joint government press briefing on Korea's 2023 economic policy direction at the Government Complex in central Seoul, Wednesday. From left are Minister of Land, Infrastructure and Transport Won Hee-ryong, Choo and Financial Services Commission Chairman Kim Joo-hyun. Yonhap

Korean gov't cuts 2023 growth outlook to 1.6 percent

By Yi Whan-woo

Korea will ease regulations on cash incentives next year for foreign businesses operating here to encourage investments in proprietary and other cutting-edge technologies on the country's path to enhancing supply chain security and nurturing new growth engines, the government said Wednesday.

Korea will also include foreign residents in its new census studies, starting in January, in a bid to cope with the declining population.

A record 111,000 foreign manual laborers will be allowed to enter Korea annually on E-9 visas beginning next year, while other medium- to long-term regulations on non-professional employment permits will be revised as well.

Such plans to increase foreign investments and deal with a shortage of workers are part of the 2023 economic policy directions announced jointly by the Ministry of Economy and Finance and relevant ministries, Wednesday.


The announcement was made as Korea is anticipated to continue facing severe headwinds due to a prolonged growth slowdown and persistently high inflation.

The finance ministry forecast the country's economy to grow by 1.6 percent, Wednesday, down from the 2.5 percent outlook for 2022.

The government's outlook is on par with the 1 percent range growth estimates by multiple financial institutions within and outside the country, including the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD).

The Korean economy grew in the 1 percent range or lower during only four past crises ― 1980 in the aftermath of the second oil crisis, 1998 in the midst of the Asian financial crisis, 2009 in the midst of the global financial crisis and in 2020 due to the COVID-19 pandemic.

Correspondingly, the government forecasts the current account surplus will fall to $21 billion next year from this year's $22 billion. In particular, exports are expected to shrink 4.5 percent after growing 6.6 percent in 2022.