[THE INVESTOR] The South Korean government exceeded its fiscal spending plans during the first five months of the year to help stimulate the lackluster economy, the Finance Ministry said June 22.
The government had earlier announced that it would spend approximately 60 percent of this year’s 280 trillion won (US$242 billion) budget set aside for the central government in the first half.
The ministry said it has used 135.1 trillion won of the budget in the first five months of the year, surpassing its planned spending of 129.4 trillion won over the 5-month period.
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South Korea National Assembly. |
“The government will make all-out efforts to implement the scheduled spending in the remaining period,” the ministry said.
South Korea has been dealing with a drop in exports and domestic demand since the second half of 2015, with global ambiguities such as a possible US rate hike and the so-called Brexit risks heightening the anxieties.
The government made efforts to revamp the economy in February with budget frontloading and the reactivation of an excise tax cut measure.
However, despite the effort, the latest data displayed lukewarm signs of recovery, spurring the government to take more aggressive fiscal interventions in the second half.
Asia’s fourth-largest economy expanded 0.5 percent in the January-March period from the previous quarter, slowing from a 0.7-percent on-quarter expansion three months earlier. Its export rate declined for 17 months in a row and industrial output remained stagnate for months.
This eventually led to the Bank of Korea unexpectedly cutting the key rate to a record low of 1.25 percent for the first time in 12 months in a visible move to encourage economic improvement.
The Finance Ministry will announce a list holding additional economic expansion measures next week, including a supplementary budget.
(
theinvestor@heraldcorp.com)
