Vice Minister Ki Jae: "Significant Increase in National Debt... Urgent Efforts Needed for Drastic Spending Structure Improvement"

Ahn Il-hwan, the 2nd Vice Minister of Strategy and Finance, is delivering opening remarks while presiding over the "2nd Expenditure Structure Reform Team Meeting of 2020" held at the Government Seoul Office Building on the 15th.

[Asia Economy Reporter Kwangho Lee] An Il-hwan, the 2nd Vice Minister of Strategy and Finance, said on the 15th, "Efforts to improve the expenditure structure by allocating resources based on investment priorities must be strengthened."

At the 2nd Expenditure Structure Reform Task Force meeting held at the Government Seoul Office on the same day, Vice Minister An stated, "During the active fiscal management process to overcome the COVID-19 crisis, national debt inevitably increased significantly."

The government has prepared four supplementary budgets this year, including two rounds of disaster relief funds for COVID-19 response.

Vice Minister An emphasized, "Although government finances are still at a relatively good level compared to advanced countries, it is time to respond to maintain medium- to long-term fiscal soundness. To comply with the fiscal rules applied from the 2025 fiscal year, we must thoroughly prepare and make every effort from now on."

He added, "With the integrated fiscal balance ratio in the mid-term plan reaching between -3% mid to late and -4%, we need to enhance fiscal sustainability through expenditure restructuring and strategic resource allocation."

So far, the government has secured about 20 trillion won of supplementary budget resources through expenditure restructuring to reduce deficit bond issuance during the supplementary budget preparation process.

Vice Minister An said, "We will proactively prepare to gradually normalize projects that temporarily increased significantly during the COVID-19 crisis response as the economy recovers. We will actively identify parts of existing expenditures that can be restructured according to changes in population, economy, and industrial structure such as declining school-age population and the activation of the non-face-to-face economy."

He also explained, "We will re-examine the performance of projects promoted by each ministry and use in-depth evaluations of fiscal projects to select underperforming projects, thereby promoting expenditure efficiency and institutional improvements."

Vice Minister An expressed, "The core of expenditure restructuring is to expand the medium- to long-term growth potential of our economy through strategic allocation of resources, including active reinvestment of resources."

He added, "In February, the government selected 15 field-oriented innovation leading models to establish and spread concrete success cases of innovative growth. Through support for region-specific development such as the Korea Total Tourism Package, hydrogen city construction, and smart city pilot city development, we plan to contribute to strengthening the dynamism of regional economies."

Furthermore, he said, "We plan to nurture related industries as future growth engines of our economy by supporting new industries such as smart manufacturing companies, AI innovation talent development, and cancer treatment through medical big data."

The government plans to invest a total of 844.6 billion won in these innovation models next year.

Vice Minister An urged, "Expenditure efficiency cannot be promoted by the will of fiscal authorities alone. Not only fiscal authorities but also each ministry must work together to consider areas where budget savings are possible."

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