SEOUL– President Moon Jae-in on Tuesday emphasized the importance of maintaining an aggressive fiscal policy next year, as the government has proposed an 8.3 percent hike in the state budget.
“(We) are facing a very important time for the nation in the midst of the world’s order of upheaval and great transformation. The fiscal role is more important than ever,” he said at the start of a weekly Cabinet meeting.
Main agenda items included the budget plan for fiscal 2022. In its final annual budget scheme, the liberal Moon administration plans to request that the National Assembly approve a 604 trillion-won (US$518 billion) budget, up 8.3 percent from this year.
Moon said South Korea’s economy has been faring relatively well amid the COVID-19 pandemic thanks to its expansionary fiscal policy. He expects Asia’s fourth-biggest economy to post at least 4 percent growth in 2021.
“At a time when the coronavirus crisis has greatly dampened the private sector, aggressive fiscal policy is playing a role in boosting private investment and consumption by serving as priming water for the economic recovery,” the president said.
In particular, he said, next year’s budget use will focus on completely overcoming the coronavirus crisis and making “strategic investments” for the future of the country. The government plans to expand support for the procurement of enough vaccines, development of indigenous products and efforts to emerge as a “global vaccine hub,” he added.
Moon dismissed worries about fiscal soundness.
“Aggressive fiscal investment has accelerated the economic recovery, creating a virtuous cycle of increasing tax revenues,” he said. “The fiscal deficit has shrunk, and the pace of growth in the national debt ratio has slowed.”
Source: Yonhap News Agency