select languages
Business_titleIndustryEconomyMarketlmenu_bottom
mostview_topstock
mostview_bottom
latestnewslatestnews RSS
Economy
Home > Business > Economy
(News Focus) Next year's budget focused on boosting economy
SEOUL, Sept. 25 (Yonhap) -- The government places the top priority of its 2013 budget proposal on supporting domestic demand and exporters in a bid to jump-start the economy, which is facing tough market conditions at home and abroad.

   The budget plan, unveiled by the finance ministry on Tuesday, also zeroes in on creating more jobs and supporting welfare programs "tailored" to each step of a person's life cycle, while strengthening the economic fundamentals and producing talented workers for the country's sustained growth.

   Under the proposal, the government will seek to spend 342.5 trillion won (US$306 billion) next year, up 5.3 percent from this year's 325.4 trillion won. The spending plan will be submitted earlier next month to the National Assembly for approval.

   The budget proposal is based on the assumption that the Korean economy will grow 4 percent next year, bringing in 373.1 trillion won in revenue, up 8.6 percent from this year.

   The budget plan comes amid growing concerns that Korea's exports-reliant economy could face a bumpy road ahead as uncertainty is growing amid the prolonged eurozone debt problems and lingering concerns over a global slowdown.

   The government has been working hard to maintain its fiscal soundness, which helped the country receive back-to-back credit upgrades from three major ratings agencies in recent months. But it remains squeezed to come up with measures aimed at stimulating its economy, which might lose momentum in the face of toughened global market conditions.

   "We worked hard to come up with necessary measures to support the fiscal role at a time when it was difficult to increase fiscal spending significantly due to a toughening revenue-raising environment," the ministry said.

   "The government expanded fiscal spending as much as possible within the overall direction of maintaining a balanced budget."

   The budget for 2013 is focused on stimulating domestic demand and regional economies. In a related move, the government plans to expand its policy finance support for smaller companies by 8.5 trillion won for next year, while setting up a 1-trillion-won fund to support their facility investment.

   It will set aside money to help the so-called U-turn companies that operate overseas but seek to come back to the domestic market and strengthen its efforts to lure more foreign direct investment. To support exporters, the government will also provide an additional 30 trillion won worth of policy financing.

   Job creation is another main topic of the budget proposal for next year amid concerns that an economic slowdown could discourage hiring in the private sector.

   The ministry said that it will provide fiscal support in creating 589,000 jobs in the public sector this year, up 25,000 from this year, providing more working opportunities for younger people, women and senior citizens.

   In particular, the government will create 100,000 jobs for younger people, including intern programs. For baby boomers who are close to retirement or have already left the workforce, the number of jobs available for them will increase from 10,000 to 30,000 next year, according to the ministry.

   In line with growing demand for welfare benefits, the government will increase childcare support for babies aged five or younger and expand scholarships for students. For older populations, it will increase the number of jobs available and also provide more medical care, the ministry said.

   To strengthen the nation's growth potential, the spending plan calls for 16.9 trillion won to be used on research and development, 5.3 percent more than the money set aside for the purpose this year. The government plans to increase expenditures on social infrastructure by 3.6 percent to 23.9 trillion won.

   Vice Finance Minister Kim Dong-yeon said that his biggest challenge in drawing up next year's budget was to "strike a balance" between the government's policy objectives to maintain fiscal soundness and pursue measures to actively use fiscal capacity to boost the economy.

   "We came to a conclusion that we have to pursue fiscal spending even at the expense of risking a balanced budget," Kim told reporters.

   "But we came up with measures within the range of attaining a balanced budget to support working-class and underprivileged people, and inject stimulus into the overall economy."

   kokobj@yna.co.kr
(END)
HOMEtop