Korea parliament approves record 607.7tr won budget for 2022

04-Dec-2021 Intellasia | Reuters | 5:02 AM Print This Post

South Korea’s parliament on Friday approved increasing next year’s budget by a net 3.3 trillion won to 607.7 trillion won ($516.42 billion), to support a swifter economic recovery and help those hit by the coronavirus pandemic.

That would be an 8.9 percent increase from this year’s budget that excludes two emergency supplementary budgets, the finance ministry said. South Korea’s fiscal year starts on January 1.

The budget increases spending by a total 8.9 trillion won from the initial proposal, including 2 trillion won of stimulus to help small businesses and 1.4 trillion won to secure COVID-19-related quarantine and medical infrastructure.

Offsetting some of the increase was a cut totalling 5.6 trillion won from the original budget after lawmakers adjusted priorities.

Friday’s parliamentary approval comes about three months after the initial proposal of 604.4 trillion won in late August and is expected to bring the ratio of government debt to gross domestic product to a record 50.0 percent in 2022.

Asia’s fourth-largest economy, heavily reliant on exports of computer chips, smartphones, cars and ships, looks on track for a 4 percent growth this year, according to central bank forecasts, rebounding solidly from a 0.9 percent contraction in 2020 the worst performance in a decade.

The Bank of Korea raised the policy interest rate (KROCRT=ECI) by half a percentage point in two steps since August to 1.00%, while markets have priced in another hike next year.

($1 = 1,176.7500 won)



Category: Korea

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