Gov`t Set to Approve Massive Additional Budget Spending

The government yesterday said it will seek additional budget spending early to stimulate the economy. Accordingly, it launched a full-fledged review on the size of the additional budget, which is set to become the largest in history, and the timing of its implementation.

Though only a month has passed this year, the decision came at the demand of the public and private sectors in the face of the sharp economic slowdown.

The Strategy and Finance Ministry said yesterday that it asked the state-run Korea Institute of Finance to provide a prompt analysis on the principal, size and beneficiaries of the additional budget last week.

An institute official said, “We’re looking into the appropriate amount of the additional budget spending given the economic conditions, and the ministry will be informed as soon as the results come out.”

A ministry official said, “Many cite the inevitable need to expand fiscal spending to lessen the impact of the economic downturn. Therefore, we seek advice from private sector experts to make the additional spending a reality.”

Given the severity of economic troubles both at home and abroad, officials asked for additional budget spending of more than 10 trillion won (7.2 billion U.S. dollars). In 2003, the government spent 7.5 trillion won (5.2 billion dollars) more after the credit card crisis broke out.

The ministry has completed coordination with minister-designate Yoon Jeung-hyun on the additional budget. Therefore, talks on this matter are likely to gain pace immediately after Yoon formally takes office Monday.

When President Lee Myung-bak stressed the importance of providing guaranteed insurance to exporters, Strategy and Finance Minister Kang Man-soo said Wednesday, “If the export insurance fund now at 170 trillion won (123 billion dollars), dries up, we’ll actively consider raising the amount when the additional budget spending is discussed.” This indicates a high possibility of drawing up the additional spending budget.

The ministry will also officially announce the revised National Finance Act to allow a proactive compilation of the additional budget to tackle the economic slump.

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