"To Overcome the COVID Crisis" ... Last Year's Local Fiscal Execution Rate Hits Record High of 90%

[Asia Economy Reporter Jo In-kyung] Despite the economic crisis caused by the COVID-19 pandemic, the local government expenditure rate last year reached 90%, marking the highest performance ever recorded.

The Ministry of the Interior and Safety announced on the 4th that to overcome the local economic crisis caused by COVID-19 in 2020, local governments executed a total local budget of 432.5 trillion won, which is 66.5 trillion won more than in 2019. The expenditure rate increased by 2.5 percentage points from 87.4% in 2019 to 89.9%.

The Ministry evaluated that last year, to overcome the national economic crisis caused by COVID-19, each local government set their original budgets at the maximum level and, when resources were insufficient, strategically managed finances by considering fiscal soundness and promoting local bond issuance. The Ministry also established and operated the 'Local Finance Rapid Execution Task Force' in 243 local governments nationwide, led by the Director of the Local Finance and Economy Office, heads of city/provincial planning and management offices, and deputy heads of city/county/district offices, to encourage budget execution.

Additionally, through systematic management of expenditures from the beginning of the year, the largest scale of budget execution in history was achieved in the first half of the year, which helped prevent the so-called 'year-end budget rush' phenomenon.

By promoting institutional improvements through proactive administration, the amount for negotiated contracts has been temporarily expanded until June this year, and various guarantees such as bid deposits and contract guarantees have been temporarily reduced to support struggling small business owners and micro-enterprises.

Minister Jeon Hae-cheol of the Ministry of the Interior and Safety stated, "Last year, central government ministries and local governments moved with one mind to overcome the quarantine and economic crisis caused by COVID-19," adding, "This year as well, we will actively support and cooperate from the beginning of the new year to ensure that efficient local finance management can serve as a catalyst for economic recovery."

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