"Active Role of Finance Still Crucial... Full Effort to 'Completely Overcome COVID-19'" (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] President Moon Jae-in evaluated that the role of fiscal policy was significant in overcoming the COVID-19 crisis, stating that "the active role of fiscal policy is still urgently needed." He emphasized that next year's budget also focuses on completely overcoming COVID-19.

On the 31st, President Moon chaired a Cabinet meeting via video conference at the Blue House and said, "Expansionary fiscal policy created a virtuous cycle effect during the crisis period, leading to economic recovery, increased tax revenue, and improved fiscal soundness."

He explained that active fiscal investment accelerated the pace of economic recovery, raising the growth rate, which in turn increased tax revenue, reducing the fiscal deficit and slowing the increase in the national debt ratio.

President Moon emphasized, "We have felt the effects of expansionary fiscal policy last year and this year. In a situation where the private sector was greatly contracted due to the COVID-19 crisis, active fiscal policy has served as a primer for economic recovery, promoting private investment and consumption."

He particularly noted that the high growth forecast of over 4%, and the rapid economic recovery assessments by international organizations such as the OECD and the IMF, are thanks to expansionary fiscal management. "The government’s fiscal policy has played a supporting role in protecting small and medium-sized merchants, self-employed individuals, and vulnerable groups, safeguarding people's lives and jobs, mitigating the deepening market income gap, and improving distribution," he explained.

He called for an active role of fiscal policy in next year's budget as well. President Moon stated, "The road to full recovery is still long, and to respond to huge changes such as the restructuring of global supply chains, changes in the international trade order, and the transition to a low-carbon and digital economy, the active role of fiscal policy is still urgently needed."

He cited "complete overcoming of COVID-19" as the main role of next year's budget. President Moon said, "We have sufficiently included budgets for quarantine and vaccines," adding, "We will proactively secure sufficient vaccine supplies, improve medical infrastructure such as hospital beds and medical staff expansion, and also expand support for domestic vaccine development and the global vaccine hub."

Additionally, to ensure inclusive recovery, the government plans to strengthen social safety nets, reduce gaps in five major sectors including education, housing, healthcare, care services, and culture, and support youth through initiatives like the Youth Hope Ladder package.

He also mentioned building a foundation to leap forward as a leading country in carbon neutrality and the Korean New Deal. President Moon said, "Along with efforts to decarbonize the entire industry, we will lead green promising industries such as the hydrogen economy and expand support for a fair transition," adding, "We will strongly promote an evolved Korean New Deal, expand investments in digital transformation and future industries, and actively invest in the newly established Human New Deal."

President Moon said, "Our government is destined to fulfill its role as a crisis-overcoming government until the very last moment of its term," and urged, "To fulfill that responsibility, each ministry should do its best to communicate and cooperate more actively with the National Assembly so that the government budget bill can be passed by the National Assembly."

At the Cabinet meeting that day, the 604.4 trillion won budget bill for next year, to be submitted to the National Assembly today, was reviewed and approved.

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