Acknowledgments  1
Executive Summary  3

A Recent Developments and Outlook  5
A1 Real Sector Developments and Outlook  5
A2 External Sector  7
A3 Monetary Conditions and the Financial Sector 8
A4 Fiscal Sector 12

B Risks, Vulnerabilities and Challenges  14
B1 Near-term Risks to Economic Outlook  14
B2 Medium-term Challenges and Vulnerabilities 16

C Policy Discussions and Recommendations  18
C1 Calibrating Monetary Policy in a Volatile Environment  18
C2 Safeguarding Financial Stability amid High Interest Rates  20
C3 Ensuring Fiscal Sustainability 21
C4 Addressing Structural Issues to Revive Long-term Growth  24
Box A Further Developing Green Bond Financing 25

Appendices 27
Appendix 1 Selected Figures for Major Economic Indicators  27
Appendix 2 Selected Economic Indicators for Korea 31
Appendix 3 Balance of Payments  32
Appendix 4 Statement of Government Operations  33
Appendix 5 Debt Sustainability Analysis 34
Appendix 6 Data Adequacy for Surveillance Purposes: Preliminary Assessment  36

Annexes: Selected Issues 37
1 Affordability and Determinants of Korean Housing Prices 37
2 Korea’s Semiconductor Industry: Enhancing Resilience and Preparing for the Future  43
3 Assessing the Impact of Interest Rate Changes on Consumption in Korea: The Role of Liquidity Constraints and Indebtedness  51
4 Policy Considerations for Public Pension Reforms in Korea 58