The Ministry of Strategy and Finance expects the government's budget next year to reach between W306 and 311 trillion (US$1=W1,181).

In a report submitted to the National Assembly, the ministry said in order to balance the budget it will maintain the annual rate of state spending increases at 4 to 5 percent until 2014.

According to officials, spending is expected to expand significantly next year in areas related to health insurance, the national pension, interest on national debt and easing the burden on the working class.

The ministry also added that although Korea's financial condition is relatively stable compared to other countries, risk factors such as the low birthrate, aging population and long-term cost of reunification must be monitored closely.