“Growth is forecast at 1.5 percent this year and is expected to rise to 2.2 percent next year. It will be supported mainly by domestic consumption, with contribution from exports and investments,” Asakawa said during a press conference on the sidelines of the ADB’s annual meeting at Songdo Convensia in Incheon west of Seoul, Tuesday.
Asakawa believes that inflation will be brought gradually under control, reaching 3.2 percent next year. He also allayed concerns about capital outflows resulting from a widened interest gap between the U.S. and Korea.
“Korea is less likely to face a shortage of foreign currency or liquidity,” he said, adding that it will gradually “go through a solid growth response within the next couple of years.”
The comments were made on the first day of the ADB’s 56th annual meeting, which is being held through Friday. The meeting is being attended by around 5,000 people, including finance ministers and central bank governors from around the world.
The Asian Development Bank (ADB) President Masatsugu Asakawa, right on the stage, and Bernard Leigh Woods, head of communications at the ADB, talk during a press meeting at Songdo Convensia, Incheon, Tuesday. Korea Times photo by Choi Won-suk
“Korea is showing a leadership role (in tackling climate change within the ADB). So I encourage the efforts and appreciate Korea’s contribution,” he said.
During the conference, Asakawa announced the launch of a new project, “Innovative Finance Facility for Climate in Asia and the Pacific” (IF-CAP). The project aims to provide funding to developing countries that experienced losses worth billions of dollars due to climate-related events. In 2020 alone, the region suffered $67 billion in losses due to natural disasters.
The project’s initial partners are Denmark, Japan, Korea, Sweden, the United Kingdom, and the United States. These partners are currently in talks with ADB about providing a range of grants for projects, along with guarantees for parts of the regional development bank’s sovereign loan portfolios. The ADB has set a goal of raising $100 billion for climate change initiatives between 2019 and 2030 using its resources.
Regarding contributions to be made from Korea, Asakawa said, “We don’t know how much yet. It has to be discussed. But Korea was very quick in responding to new ways in financial history.”
On the first day of the event, Tuesday, two high-profile meetings were held. One was between finance ministers and central bank governors from Korea, China, and Japan. The other meeting involved officials from ASEAN and Korea, China, and Japan.
The highlight of the meeting is scheduled to take place on Wednesday with the Opening Session of the ADB Board of Governors. Business Sessions of the ADB Board of Governors will be held the following day, during which the bank’s budget and action plans for 2024 will be determined.
