South Korea's finance minister said Tuesday the government is committed to building a favorable business environment by revamping regulations and offering tax cuts as he asked local firms to proactively roll out investments.

Finance Minister Choo Kyung-ho made the remark during a meeting with officials from the Federation of Korean Industries, one of South Korea's biggest business lobbies that speaks for large companies, according to the Ministry of Economy and Finance.

"In general, exports remain challenging without signs of a sharp recovery in the economy," Choo said in his opening remarks, noting the government has been making efforts to ease regulations and taxation to pave the way for business activities.

Exports fell for the eighth consecutive month in May, decreasing 15.2 percent on-year. The decline came as exports of semiconductors, the country's key export item, sank 36.2 percent on falling demand.

The minister asked the companies to roll out aggressive investments and build up capabilities to lead the global market.

"Rather than the direct government's intervention or expenditures, it is the private sector that leads the South Korean economy and its future," Choo added, emphasizing the importance of the market system.

During the meeting, the FKI members urged the government to broaden tax support for local companies, overhaul regulations and expand assistance for the carbon neutrality initiative.

Choo said the government will proactively reflect the results of the discussion with the business groups.

Separately, Choo hinted that South Korea's inflation is anticipated to reach the 2 percent level in June or July.

Consumer prices, a key gauge of inflation, rose 3.3 percent in May from a year earlier, compared with a 3.7 percent on-year advance in April, according to a recent report from Statistics Korea. The latest figure marked the lowest level since the 3.2 percent growth tallied in October 2021.

The finance minister, however, acknowledged the potential increase in consumer prices later in 2023, citing the impact of summer weather conditions on agricultural product prices.

"There are still uncertainties. The global prices of raw materials and oil have not yet entered a clear downward trend," the minister said. "There are also other factors, such as weather and geopolitical risks."

Choo said while South Korea's job market remains stable in terms of data, it remains challenging for younger people.

"There are also labor shortages at job sites, with the demand for foreign workers also increasing," the minister said.

In May, the employment-to-population ratio of those aged 15 and above reached 63.5 percent in the month, up 0.5 percentage point on-year, marking the highest level for any May since the agency began compiling related data in 1982.

The jobless rate fell 0.3 percentage point on-year to 2.7 percent in the month.

The job market was nevertheless challenging for younger South Koreans, as the number of positions for the 20-something group declined by 63,000 during the period and those for 40-somethings slipped by 48,000. (Yonhap)