72% of Next Year's Budget to Be Spent in the First Half... 333 Trillion Won Scale

2021 Budget Allocation Plan Confirmed

Early Allocation Focused on Industry, SMEs, SOC, and R&D Sectors

[Sejong=Asia Economy Reporter Ju Sang-don] The government allocated 72.4% of the total expenditure budget (based on the total of general and special accounts) in the first half of the year to be immediately deployed for overcoming the COVID-19 crisis and early economic revitalization.

The Ministry of Economy and Finance announced on the 8th that the '2021 Budget Allocation Plan' containing this content was confirmed at the Cabinet meeting. Budget allocation grants each ministry the right to use the budget. Only after budget allocation can expenditure-triggering actions such as contracts be carried out.

The total expenditure for next year’s budget is 558 trillion won. Excluding funds, the total expenditure budget combining general and special accounts for next year is 459.9 trillion won. Of this, 333.1 trillion won, or 72.4%, will be spent in the first half of the year. Following this year’s 305 trillion won, the first half allocation budget will exceed 300 trillion won again next year. The first half allocation rate for next year is set 1 percentage point higher than this year’s 71.4%, marking the highest since the 2000s. The previous highest first half budget allocation rate was 71.6% in 2013. Typically, the government sets the allocation plan higher than the actual execution plan to ensure smooth fiscal execution.

The government made early budget allocations for next year focusing on industry, small and medium enterprises (SMEs), social overhead capital (SOC), and research and development (R&D) sectors to support economic recovery and secure future growth engines. Instead of mandatory expenditure budgets with fixed spending periods, the budget for discretionary expenditure areas, which can be spent flexibly, was concentrated in the first half.

The next step after budget allocation is fund allocation, which grants ministries the right to use the funds. Subsequently, each ministry receives funds within the scope of their fund plans and executes projects. A Ministry of Economy and Finance official explained, "Based on budget allocation, actual execution plans will be established," adding, "The scale of early execution for managed projects will be presented in the 2021 Economic Policy Direction to be announced soon, and the overall execution plan including this will be established early next year." Actual execution of next year’s budget, including the third disaster relief fund, will begin in early January next year.

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