January Central Fiscal Execution Rate at 10.9%, 'Highest Since Management'... "Active Execution Needed to Overcome COVID-19"

Koo Yoon-chul, 2nd Vice Minister of Strategy and Finance (left), is holding the 4th Fiscal Management Inspection Meeting at the Government Seoul Office Building on the afternoon of the 27th to review this year's fiscal execution plan and the execution performance for January.

[Asia Economy Reporter Kim Hyunjung] In January of this year, the execution rate of central government finances reached the highest level since management began. The government emphasized more active execution of both central and local finances to overcome the novel coronavirus disease (COVID-19).

On the afternoon of the 27th, Koo Yoon-cheol, the 2nd Vice Minister of the Ministry of Economy and Finance, held the 4th Fiscal Management Inspection Meeting at the Government Seoul Office to review this year’s fiscal execution plan and the January execution performance. The meeting was attended by directors of policy offices from related ministries and deputy heads of metropolitan local governments.

According to the Ministry of Economy and Finance, the scale of central government financial execution in January this year was 33.3 trillion KRW, which is 10.9% of the annual plan of 305.5 trillion KRW. This exceeded the initial plan (26.4 trillion KRW) by 6.9 trillion KRW, marking the highest level since execution management began in 2002 based on the execution rate. Vice Minister Koo explained, "This is the result of each ministry proactively preparing for fiscal execution since last year and carrying it out swiftly and without setbacks."

Local finances and local education finances in January were executed at 18.4 trillion KRW and 1.2 trillion KRW respectively, with execution rates of 8.0% and 17.1%, showing levels similar to the previous year. Vice Minister Koo said, "To keep the spark of economic recovery alive, this year’s early execution target is set at an all-time high (central 62.0%), and considering that the first quarter’s execution plan is concentrated in March (47.4%), each agency must ensure the achievement of the first quarter’s execution target by accelerating execution during March, the last month of the first quarter."

Regarding welfare benefits, out of the budget of 71.8 trillion KRW for this year, 8.4 trillion KRW (11.6%) was executed in January, exceeding the plan (7.8 trillion KRW, 10.8%) by 600 billion KRW.

At the meeting, Vice Minister Koo also urged active fiscal execution to respond to COVID-19. He stated, "Currently, the government is mobilizing all fiscal capacity and policy capabilities to carry out two core tasks?quarantine and economy?without setbacks under the recognition that the current situation due to COVID-19 is an emergency economic situation. The central government is making thorough efforts to support proactive quarantine by providing the existing quarantine budget (20.8 billion KRW) and the central government’s purpose reserve fund (109.2 billion KRW), and plans to promptly support the quarantine measure budget from the remaining disaster contingency funds even before the supplementary budget is formulated."

He further emphasized the importance of executing local finances and local education finances. Vice Minister Koo said, "Considering concerns about the slowdown in consumption and investment in our economy due to COVID-19, a ‘first comprehensive package support measure’ has been prepared and is scheduled to be announced this week. To support local economies directly affected by COVID-19, efforts by the central government alone have limitations, and execution of local finances and local education finances, which are in direct contact with the field, is very important."

He also stressed, "Local finances and local education finances must execute the previously allocated quarantine measure budgets without fail under the recognition that the safety of local residents is the top priority, and do their best to achieve the highest execution targets in the past five years for the first half of the year (local finances 60%, local education finances 62%) to recover the local economy and livelihoods." Additionally, he said, "If necessary, consider promoting supplementary budget formulation by local governments focusing on support for small business owners and small and medium-sized enterprises, which have a significant ripple effect on the local economy," and added, "The central government will also actively cooperate through the Ministry of Economy and Finance, Ministry of the Interior and Safety, and relevant ministries to resolve difficulties in executing local finances by promptly providing funds and simplifying administrative procedures."

This content was produced with the assistance of AI translation services.