1 in 2 Opinion Leaders Say "Achieving 3% Potential Growth Rate is Feasible"

Korea Economic Daily

Summary

53% of opinion leaders in Korea conveyed that the goal of achieving a 3% potential growth rate is fully attainable depending on government will.
They stated that corporate investment driven by labor reform and tax benefits is a key policy for raising the potential growth rate.
The most resonant policy cited was the shift to negative regulation.

Survey of 100 Opinion Leaders

Boosting Productivity through Labor Reform

Incentivizing Corporate Investment via Tax Benefits

One out of two opinion leaders in Korea responded that President Lee Jae-myung's presidential campaign pledge to 'achieve a 3% potential growth rate' is an "achievable goal." To raise the potential growth rate, it was advised to improve productivity through labor reform and to promote corporate investment with tax benefits, among other measures.

According to a survey conducted by The Korea Economic Daily between the 4th and 8th—after President Lee took office—on 100 opinion leaders from business, academia, and former senior officials, 53% of respondents answered 'it is fully achievable depending on government will' when asked, 'Do you think a 3% potential growth rate is an attainable goal?' Conversely, 39% responded 'it is impossible considering factors like the aging population.' 8% answered 'not sure.' The potential growth rate refers to the economic growth rate that can be achieved without causing inflation if production factors such as labor and capital are maximally utilized; it is currently estimated at about 1.8% for Korea.

When asked about policies aimed at boosting the potential growth rate (multiple responses allowed), 60% chose 'improving labor productivity through labor reforms such as restructuring the wage system and increasing flexibility in working hours,' making it the most frequent response. This was followed by incentivizing corporate investment through tax benefits for high-tech industries (54%), and accelerating the transition to artificial intelligence (AX) to increase total factor productivity (41%).

The part of President Lee's inaugural address that resonated the most, chosen by 31%, was 'the shift to negative regulation.' The response, 'the government will be a pragmatic market-oriented one that utilizes both Park Chung-hee’s and Kim Dae-jung’s policies,' followed with 24%. Kim Sun-jin, physician and CEO of Kolon Life Science, commented, "Regulatory agencies in advanced countries permit everything except what is explicitly prohibited," adding, "Such systems can maximize corporate creativity and entrepreneurial spirit."

By Dongwook Jwa / Jinkyu Kang, reporters