President Moon: "Expansionary fiscal policy must be maintained at least until next year... 'Expenditure restructuring' needs to be pursued simultaneously" (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] President Moon Jae-in urged the role of finance, stating that "to achieve economic recovery and close the COVID-19 gap, an expansionary fiscal stance must be maintained at least until next year." He also added that the possibility of additional fiscal spending this year should remain open. At the same time, he emphasized the necessity of parallel expenditure restructuring, planned application of fiscal rules, and exit strategies for temporary projects.

At the fiscal strategy meeting held at the Blue House on the 27th, President Moon said, "It is true that national debt has been increasing rapidly during the recent crisis response, but compared to other countries, the increase is relatively low and fiscal soundness is in good condition."

President Moon highlighted the recovery trend, saying, "Gross Domestic Product (GDP) has returned to pre-COVID crisis levels, and there are forecasts that the annual growth rate will rise to the 4% range for the first time in 11 years," but he also pointed out the job crisis and worsening market income inequality, diagnosing that "the recovery is still only partial."

He pointed out, "Economic recovery is uneven across industrial sectors, job polarization is clear, and above all, the job situation is difficult," adding, "Not only is there a gap between social classes, but disparities among various economic sectors are also widening."

Accordingly, he stated that finance must play an active role to correct polarization between classes. President Moon said, "We must steadily increase investments in employment safety nets and social safety nets, such as supporting jobs for vulnerable groups, promoting universal employment insurance, and abolishing the support obligation criteria for livelihood benefits," and added, "While promptly executing this year’s budget, if necessary, we should keep open the possibility of additional fiscal spending using the significantly increased additional tax revenue."

[Image source=Yonhap News]

President Moon also emphasized that finance should play a role in future investments. He said, "Starting with the Korean New Deal, which will invest a total of 160 trillion won by 2025, we need to further expand investments in new industries and technologies," and added, "I hope that comprehensive reviews will be conducted, including not only finance but also taxation and government procurement."

He also requested expenditure restructuring amid expansionary fiscal policy. President Moon said, "Effectively allocate government budgets to the right places to strengthen inclusiveness and increase support in new industry development," but also noted, "It is necessary to boldly carry out expenditure restructuring for projects with lower priorities."

He continued, "We must also prepare for the period after our economy returns to a normal track," adding, "Exit strategies for projects that were temporarily promoted and expanded in response to the crisis must be prepared in advance." He also urged preparations to ensure that the 'fiscal rules' are applied as planned.

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