Korea’s state-owned enterprises plan to increase investments of about 510 billion won ($458.5 million) for infrastructure and energy development projects in the second half of this year, the government said Tuesday.
The 14 public enterprises are budgeted to spend 53.4 trillion won this year, including 1 trillion won allocated from supplementary spending.
Public enterprises invested about 40 percent of the 1 trillion won in the first half of this year.
The increase in public investment comes as the Ministry of Strategy and Finance aims to achieve 3 percent growth in the latter half of this year through rapid fiscal stimulus.
In a forum hosted by the Federation of Korean Industries last week, Deputy Prime Minister and Finance Minister Hyun Oh-seok said that the government has drawn up plans to expand investment in infrastructure to “complement” private investment and consumption.
The extra budget for state enterprises will mostly be used for existing projects, upgrades and maintenance as the government previously mentioned when the incumbent administration urged ministries to cut unnecessary and inefficient spending.
The Korea Rail Network Authority, the state-run rail engineering company, will invest more than 100 billion won to improve the railway’s safety systems.
Korea Expressway, the state-owned operator of roads, will spend an additional 30 billion won on highway operations and maintenance in the second half of this year.
In the energy sector, Korea Gas Corp, the state-run importer of liquefied natural gas, plans to expand investment by up to 51 billion won to boost gas supplies to underdeveloped areas.
Korea Midland Power, the state-owned electric power plant operator, and other sister operators will increase investment in building new plants.
Infrastructure development and spending have been among the most effective ways to improve the economy while private investment, consumption and exports dwindle amid the global slowdown.
Korea has so far enjoyed continuous trade surplus thanks to brisk exports of IT products, but the Bank of Korea said the general public may not see much benefit from this as a few conglomerates led the country’s growth.
Infrastructure development, on the other hand, has been carried out to benefit a larger population through government spending.
By Park Hyong-ki (
hkp@heraldcorp.com)
