Outgoing BOK governor urges structural reform for growth

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Outgoing BOK governor urges structural reform for growth

Published: 21 Apr. 2026, 00:00

Audio report: written by reporters, read by AI

Rhee Chang-yong, the now ex-governor of the Bank of Korea, delivers his farewell address at a ceremony held at the central bank’s headquarters in Jung District, Seoul, on April 20. [NEWS1]

Rhee Chang-yong, the now former governor of the Bank of Korea (BOK), stepped down on Monday after completing his four-year term. During his tenure, the Korean economy faced a series of major shocks, including the Russia-Ukraine war, a domestic emergency martial law episode and the recent conflict in the Middle East. Reflecting on his term, Rhee said the past four years in their entirety went beyond what he had anticipated when he first stepped into the role. Even now, the economy remains in the middle of what is often described as a “three highs” crisis: high oil prices, high interest rates and high exchange rates.

But Rhee expressed greater concern about the lack of progress in structural reform than about these immediate challenges. Throughout his tenure, he released more than 20 reports urging reforms in education, labor and real estate to address low birthrates and slowing economic growth. In his farewell remarks, he warned that as the economic structure changes, it will become increasingly difficult to achieve stability and growth through monetary and fiscal policies alone. Rather than relying on short-term measures with only temporary effects, he argued, more fundamental solutions are needed, even if they require managing conflicts and adjusting entrenched interests.

His warnings regarding prolonged stagnation are not limited to the central bank. Both domestic and international institutions have raised similar concerns. The International Monetary Fund (IMF) recently projected that Korea’s real GDP per capita, which was overtaken by Taiwan last year, will continue to fall behind. According to the IMF, Korea’s per capita GDP is expected to reach $37,412 this year, compared to Taiwan’s projected $42,103. While Korea has remained in the $30,000 range for 12 consecutive years, Taiwan, which surpassed that threshold only in 2021, is expected to break through the $40,000 mark first. The gap between the two economies is also forecast to widen further and exceed $10,000 within five years.

In the past, the BOK’s reports on structural reform have often sparked debate over specific proposals. Critics have also argued that the central bank should focus more on its core mandate of monetary policy and price stability. However, there is little disagreement with the broader diagnosis that escaping the trap of low growth will be difficult without structural reform.

Rhee’s repeated remarks underscore the urgency of the issue. It is notable that even the BOK, traditionally cautious about stepping beyond its remit, has felt compelled to advocate for structural change. Rhee’s calls for action serve as a reminder that policymakers cannot depend solely on short-term tools to address deeper economic challenges.

The government and political leaders would do well to heed his warning. Without sustained efforts to reform the underlying structure of the economy, the prospects for long-term growth will remain limited despite any temporary gains achieved through policy intervention.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.