September 09, 2015 12:06
Korea's budget for next year will increase by three percent from this year, from 3.754 trillion to 3.867 trillion (US$1=W1,200). The increase is the lowest since 2.9 percent in 2010.
A Cabinet meeting on Tuesday confirmed the budget plans for 2016 and will submit them on Friday to the National Assembly, which has until Dec. 2 to review them.
The government decided on the small increase in view of low economic growth and stagnant tax revenues. It wants to implement various pump-priming measures that aim to create more jobs. This will increase national debt to W645 trillion, up W50 trillion from this year, and the ratio of government debt to GDP will exceed 40 percent for the first time in history.
The budget for job creation, welfare and defense will grow next year but expenditure on infrastructure, industry, small and medium-sized business and energy will be cut.
Finance Minister Choi Kyoung-hwan said, "There are concerns about the national debt, but we can maintain fiscal sustainability only when the economy is revived."
The government predicted 3.3 percent economic growth next year.
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