SEJONG, April 11 (Yonhap) -- The government plans to set aside 1 trillion won (US$885 million) of its envisioned extra budget to stimulate the sluggish housing market, a top economic policymaker have said.
The government is considering drafting an extra budget aimed at making up for revenue shortfalls caused by the slowing economy and also bolstering the overall economic activities. Creating jobs and boosting the property market will likely be key parts of the plan, which is to be unveiled early next week.
"Negotiations between related ministries and agencies are necessary, but one of the main focuses (of the extra budget) is to provide support related to the housing sector," Finance Minister Hyun Oh-seok said during his dinner meeting with reporters on Wednesday.
"We plan to provide an additional 1 trillion won in support for those seeking to buy or rent homes."
The support plan is a follow-up on a set of measures that the government unveiled earlier this month to revitalize the anemic housing market.
The measures are designed to thaw the almost-frozen transactions in the property market by providing tax incentives and easing regulations on financial support for home purchasers.
Other details on the supplementary budget will not be known until next week when a Cabinet meeting will be held to discuss the issue. Observers still expect that the government might push for about 17 trillion won in extra spending.
The extra budget, if approved by the parliament, would be the second-largest after the 28.4 trillion won allocated in 2008 to tackle the unprecedented global financial crisis.
The government plans to fund the extra spending mostly by issuing bonds, raising concerns that such a massive debt sale could hurt the country's fiscal health.
Hyun admitted that a significant part of the budget should be financed by issuing bonds but noted that the government will do its best to minimize bond issuance by tapping into other resources such as last year's tax surplus and unused budget.
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