Lawmakers should lose no time in passing a supplementary budget aimed at kick-starting the economy struggling with the fallout from the Middle East Respiratory Syndrome outbreak and slowing exports, the finance minister said Tuesday.
The government on Monday submitted an 11.8 trillion won ($10.4 billion) extra budget bill to the National Assembly for approval, which is part of a larger 22 trillion won stimulus program designed to cope with the impact of MERS and breathe new life into anemic consumer spending.
Speaking to reporters in Sejong, Finance Minister Choi Kyung-hwan pointed out that the supplementary budget is the maximum amount that the government can inject into the economy at present without seriously jeopardizing its fiscal health.
“What the government learned from last year’s Sewol ferry tragedy is the need to take quick and decisive action to reduce fallout from unforeseen developments on the economy,” the finance minister said, hinting that Seoul was slow to react in 2014.
The disaster that claimed more than 300 lives in April is cited as the main reason why domestic consumption nosedived in 2014 and hurt growth.
Choi, who doubles as deputy prime minister for economic affairs, said that because of the urgency, failure to pass the extra budget plan could lead to public backlash.
On the criticism that the money to be allocated is insufficient, Choi said South Korea needs to maintain a broad fiscal balance and avoid incurring too much debt. He said the government must control spending to meet growing demand social welfare and prepare for eventual unification with North Korea.
The minister then said the government will take into account this year’s extra budget when it plans for the 2016 and 2017 budgets.
Touching on the state of the economy, Choi said that while the 3.1 percent growth being forecast for this year is below the 3.8 percent original target, the drop reflects overall weakening of trade.
He said while growth reached in recent years fails to meet high public expectations, the country’s annual growth is actually close to the global average.
On growing speculation that he may quit his post and return to the National Assembly to play a greater part in party politics, the three-term ruling Saenuri Party lawmaker stressed he is presently focused on only trying to prop up the economy.
Choi is viewed as a close confidant of President Park Geun-hye, and has the political stature to play a part in overcoming the internal turmoil rocking the Saenuri. The party has been shaken by the president’s direct criticism of party whip Rep. Yoo Seong-min.
The official, while making clear he wants to stay on as finance minister, said it is imperative that close cooperation must be maintained between the presidential office, the government and ruling party. (Yonhap)
