[2021 Economic Policy] 495 Trillion Won Injected into Policy Finance... Continued Support for the Real Sector

Central Finance to Accelerate 63% Early Execution in First Half... Encouraging Supplementary Budget Formation if Necessary

Kim Yong-beom, First Vice Minister of Strategy and Finance (center), is presenting the main points at the detailed briefing on the '2021 Economic Policy Direction' held at the Sejong Government Complex on the 14th.

[Asia Economy Reporter Kwangho Lee] The government will execute 495 trillion won in policy finance next year to continue efforts to support the real sector for revitalizing economic activity. However, considering the risks arising from increased liquidity during crisis response, it plans to thoroughly manage household and corporate loans as well as the soundness of financial institutions.

On the 17th, the government held the National Economic Advisory Council chaired by President Moon Jae-in at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, and finalized and announced the "2021 Economic Policy Direction" with these details.

Regarding foreign exchange policy, timely responses will be made to prevent excessive volatility. The government will closely monitor international financial market trends and external risk factors, and promptly implement market stabilization measures if there is a sudden increase in foreign exchange market volatility.

Additionally, temporary measures to respond to the COVID-19 crisis will be gradually normalized while observing the trend of COVID-19 spread and economic and employment conditions.

However, purchases of corporate bonds and commercial papers (CP) maturing by early next year, as well as insurance, guarantees, and liquidity supply by the Korea Trade Insurance Corporation and the Export-Import Bank of Korea, will be prioritized for extension.

The government especially aims to continue an expansionary fiscal policy stance, with central government finances targeting an early execution rate of 63% in the first half of the year, the highest ever. This will focus on job creation and social overhead capital (SOC) projects that have significant economic ripple effects.

Local governments will also concentrate on early execution of 60% of their budgets, and if necessary, will be encouraged to prepare supplementary budgets. The government plans to actively utilize "pre-establishment budget use" by local governments and complete ministry-level public offering procedures within the first quarter to promptly reflect supplementary budgets for national subsidy projects.

A government official said, "We will place the highest priority on establishing a definite momentum for economic rebound and continue proactive macroeconomic policies."

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