[2021 Budget] Hong Nam-gi "Quarantine and Economy in Wartime Situation... Must Endure Debt and Fulfill Fiscal Role"

Next Year's Budget, Total Expenditure Increased by 8.5% to '555.8 Trillion Won' Allocated
Focus on Economic Recovery, Securing Future Growth Engines, Establishing Employment Safety Nets, and Improving Quality of Life

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is reading the announcement at the detailed pre-briefing of the '2021 Budget Proposal' held at the Government Complex Sejong on the 27th of last month.

[Asia Economy Reporter Jang Sehee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said, "In the current quarantine and economic wartime situation, I believe that it is the way to overcome the COVID-19 crisis early by playing the role of finance even if we endure temporary debt and deficits." He intends to revive the spark of economic recovery through fiscal policy.

Deputy Prime Minister Hong made this statement during the '2021 Budget Preliminary Briefing' held at the Government Complex Sejong on the afternoon of the 27th of last month. The government held an extraordinary Cabinet meeting on the 1st and approved the third supplementary budget bill amounting to 555.8 trillion won.

Hong said, "The total expenditure scale of next year's budget was set at 555.8 trillion won, an 8.5% increase from this year, considering the needs for overcoming the COVID-19 crisis, promoting the Korean New Deal, and investing in national agenda projects."

He added, "However, to save even a single won of the people's tax money, we analyzed the performance of all discretionary projects from a zero-based perspective and boldly restructured about 10% of discretionary spending by drastically reducing or abolishing projects with low priority."

He continued, "Regarding the 2020-2024 National Fiscal Management Plan, the government will make every effort to manage the national debt ratio to GDP within 58.3% and the managed fiscal balance deficit ratio at about 5.6% by 2024."

Next year's budget focuses on four areas: rapid and strong economic recovery, securing future growth engines, strengthening inclusive employment and social safety nets, and enhancing public safety and quality of life.

He stated, "Next year, 21.3 trillion won in national funds and 32.5 trillion won including local government funds will be invested in the Korean New Deal, expected to create 360,000 jobs."

Additionally, he explained, "To generate 20 trillion won in private consumption, 1.8 trillion won has been allocated for local love gift certificates and consumption coupons." Furthermore, 65.9 trillion won will be invested in private and public sector investments, and 1.2 trillion won in non-face-to-face exports.

To secure future growth engines, 29.6 trillion won will be invested in advanced sector research and development (R&D) and public procurement of innovative products. Also, 46.9 trillion won will be allocated to expand the four social safety nets of livelihood, medical care, housing, and education, and 20 trillion won to establish a nationwide employment safety net.

He emphasized, "It is time to focus our capabilities on preparing for a major transformation of the economic and social structure," adding, "Next year is undoubtedly a golden time that will determine the direction of our future economy."

He concluded, "Finance is the last bastion for the national and people's economy during an economic crisis," and expressed confidence that "next year's budget will play a central role in covering this golden time."

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