Supplementary Budget, Economic Growth Rate Expected to Increase by 0.15~0.17%P... Employment Numbers Anticipated to Rise

National Assembly Budget Office 'Analysis of the 1st Supplementary Budget Proposal for 2020'
Growth Rate Enhancement Effect, Up to 0.17 Percentage Points Increase

[Asia Economy Reporter Jang Sehee] The National Assembly Budget Office forecasted that the supplementary budget (supplementary budget) for the novel coronavirus infection (COVID-19) would raise South Korea's gross domestic product (GDP) growth rate by 0.15% to 0.17 percentage points. It also analyzed that the number of employed persons would increase slightly due to the execution of this supplementary budget.

According to the National Assembly Budget Office's "2020 First Supplementary Budget Analysis" scheduled for the 14th, when combining the effects of increased expenditures and revised revenues, the economic growth rate enhancement effect of this year's supplementary budget is expected to be about 0.15% to 0.17 percentage points, and about 0.21 percentage points next year. If the supplementary budget is 100% executed within the second quarter, the growth rates for this year and next year are estimated to increase by 0.159 percentage points and 0.218 percentage points, respectively.

The Budget Office stated, "It is necessary to consider that this is the maximum estimated effect under the assumption that expenditure budgets such as contingency funds are 100% executed within the year."

The Budget Office observed that the employment growth rate due to increased expenditures is expected to rise by 0.51% to 0.17 percentage points this year and by 0.24% to 0.25 percentage points next year, depending on the execution rate.

However, the Budget Office advised that the economic effects could vary significantly depending on the transmission channels and execution rates.

In particular, since subsidies, current transfers, and loan expenditures account for 81.7%, caution is needed when interpreting the estimated economic effects mentioned above.

Furthermore, it argued that some project plans require supplementation and adjustment. In fact, among the 12 detailed projects increased under the jurisdiction of the Ministry of Health and Welfare, 4 projects are new. About one-third being newly organized raises concerns about insufficient systems accordingly.

The Budget Office stated, "Since this supplementary budget was prepared within a short period, some projects lack sufficient review regarding project demand, targets, and implementation methods, making the achievement of the budget's objectives uncertain." It added, "It seems necessary to supplement project plans during the National Assembly's deliberation process."

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