The Korean government finalized its budget for next year at 386.7 trillion won (US$324.3 billion), up 3 percent compared to this year. The rate of increase is the lowest since 2010, when it reached 2.9 percent, in view of fiscal soundness and the supplementary budget of approximately 10 trillion won (US$8.4 billion) spent this year for economic stimulus. However, the fiscal deficit increases by 37 trillion won (US$31 billion), 3.6 trillion won (US$3.0 billion) more than that of this year, and the government debt-to-GDP ratio is to exceed 40 percent for the first time.
The government is planning to submit a budget bill to the National Assembly on Sept. 11. “This bill for next year focuses on job creation, economic recovery, and economic restructuring,” Deputy Prime Minister Choi Kyung-hwan explained, adding, “Although the overall fiscal balance has deteriorated a little, we will make up for it by means of economic revitalization.”
Specifically, the budget increased in 10 out of 12 sectors including healthcare, welfare, and labor, but decreased in industry, small and medium enterprise, energy, and others.
The rate of increase went up from a year earlier in five of them: healthcare, welfare and labor (6.2 percent); culture, sports and tourism (7.5 percent); national defense (4 percent); foreign affairs and unification (3.9 percent); and general and local administration (4.9 percent). The healthcare, welfare & labor budget, which totals 122.9 trillion won (US$103.1 billion), accounts for 31.8 percent of the total budget.