Budget for Next Year Not to Exceed 120 Trillion Won

The government decided to keep the scale of budget within 120 trillion won forecasting the real growth rate to be 5 to 6 percent in the next year. The government settled the budget compilation guide at the Cabinet meeting on the 26th.

Chang Seung-Woo Minister of Planning and Budget (MPB) said, “with business on the rise, real growth rate will be yearly 5 to 6 percent, and prices will be rise by 2 to 3 percent next year. We will control the increase rate of fiscal scope next year to be less than the ordinary growth rate of 7 to 9 percent. ”

Hence, the ministries will compile the budget for personnel and business expenses at as much as that of this year with total business expenses not exceeding 10 percent more than those of this year.

MPB is worried about the aggravation of revenue as △tax revenues might not increase much due to the amendment of tax laws last year like the reduction of income and corporate tax, and △the income from the sold public companies as privatization of public enterprises is completed this year.

Hence, the government is likely to try to control the increase of fiscal rate, enlarge the source of revenue by reducing tax-free or tax-reduction benefits, and control the duplicated businesses between budget and funds or funds and funds.

MPB will send budget compilation guide to every ministry by 30th, and the ministries will request the budget by the end of May according to the guide.

Rae-Jeong Park ecopark@donga.com