Vice Minister Gi Jae: "2nd Supplementary Budget to Be Reviewed in Connection with the Economic Policy Direction for the Second Half of the Year" (Comprehensive)

Second Half Economic Policy Direction... Focus on Strong Economic Rebound, Revitalizing Domestic Demand, Exports, and Investment
"Passenger Car Excise Tax Cut Extended Until Year-End"

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Lee Okwon, the 1st Vice Minister of the Ministry of Economy and Finance, said regarding the review of the supplementary budget (추경) formulation, "We plan to comprehensively examine changes in tax revenue conditions and the need for fiscal reinforcement in the process of preparing the economic policy direction for the second half of the year."

At the regular briefing of the 36th Emergency Economic Central Countermeasures Headquarters Meeting and the 2nd Innovation Growth Strategy Meeting held at the Government Seoul Office on the same day, Vice Minister Lee stated, "We plan to announce the economic policy direction for the second half of the year around mid to late next month." Earlier, President Moon Jae-in hinted at the formulation of a second supplementary budget by saying, "We should keep open the possibility of additional fiscal input using the significantly increased additional tax revenue." According to the Ministry of Economy and Finance, national tax revenue from January to March this year was 88.5 trillion won, an increase of 19 trillion won compared to a year earlier.

The main contents of the economic policy direction for the second half of the year include ▲strong economic rebound ▲revitalization of domestic demand, exports, and investment ▲job recovery ▲and proactive preparation for future changes.

Vice Minister Lee said, "Recently, the recovery trend has been faster than expected, and we will focus policy capabilities to ensure it leads to a stronger rebound," adding, "Along with domestic demand stimulation measures, we are reviewing various support measures to enhance private sector vitality in each sector such as exports and investment."

Regarding concerns about inflation, he emphasized, "The Bank of Korea adjusted its consumer price inflation forecast to 1.8% for this year and projected 1.4% for next year during its announcement yesterday," adding, "It is expected to decrease next year as base effects are removed." He also added, "Considering the recent overall demand situation, it is difficult to say that inflationary pressure is continuously appearing."

Meanwhile, the government decided to extend the policy of a 30% reduction in the individual consumption tax on passenger cars, which was scheduled to end at the end of June, until the end of the year. Additionally, to reinforce jobs, from July, a special youth employment incentive will be provided when hiring young people as regular employees. The incentive will be paid up to 750,000 won per person per month for up to one year. The government also plans to consider extending the employment maintenance subsidy period for special employment types (특고) support industries, which is currently 180 days. Furthermore, through already allocated budgets, support for vulnerable groups and farmers will be promoted, including the installation of 14 new child shelters and support for livestock disease-affected farms.

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