Our top story this morning….
The Korean government has laid out its budget plan for next year… that raises spending
by the largest amount… since the onset of the 2008 global financial crisis.
The finance ministry says its expansionary fiscal policies are necessary to pull the
economic recovery out of a protracted rut. Hwang Ji-hye has the details.
The government will maintain its expansionary economic policies in 2015 as it looks to boost
the nation′s sluggish growth rate. In its budget proposal, laid out during a
Cabinet meeting on Thursday,… the finance ministry said it will raise budget spending
by 5-point-7 percent from this year… to 376-trillion won, or roughly 360-billion U.S.
dollars. The ministry expects the increased expenditure
to actively boost the economy. It said that, although the move could threaten
the nation′s fiscal soundness in the short term,… the greater priority now is on breathing
fresh life into the sputtering economic recovery. That way… the ministry believes Korea will
be able to achieve long-term fiscal balance through increased tax revenues… generated
on the back of strong economic activities. The government expects tax revenues to rise
on average 5-point-1 percent annually from 2014 through 2018… as the increased spending
plan is projected to help the economy grow by four percent next year.
Korea′s debt-to-GDP ratio, however,… is expected to rise about one percentage point
in 2018 from this year… to over 36 percent. The government says a national debt-to-GDP
rate in the mid-30 percent range reflects Korea′s relatively healthy fiscal situation…
as it′s still much lower than the OECD average of around one-hundred-ten percent.
The expansionary budget also includes increasing expenditure in safety related government projects…
like an overall inspection of safety facilities. The government wants to prevent large-scale
accidents and disasters like April′s ferry sinking from happening again.
The new budget proposal is in line with the government′s recent efforts to prop up growth…
that included an additional spending plan worth 11 billion dollars in the second half
of this year. Hwang Ji-hye, Arirang News.