Concerns Over Economic Recession Arise, but Fiscal Spending Also 'Stagnant'... Poor Execution of Price Stabilization Projects

[Asia Economy Sejong=Reporter Son Seon-hee] As of the third quarter of this year, the government's total expenditure progress rate stood at 75.8%. In particular, the expenditure progress rate for the government's planned measures to curb high inflation remained in the low 70% range. Amid growing concerns about an economic recession next year, fiscal spending is also showing sluggish performance.

On the 11th, the Ministry of Economy and Finance held the 'Fiscal Execution Vice Ministers' Meeting' at the Government Complex Sejong, chaired by Second Vice Minister Choi Sang-dae. Vice Minister Choi stated, "As of the end of September, the total expenditure progress rate against the budget amount is 75.8% (provisional), which is somewhat lower compared to previous years," adding, "For the fourth quarter fiscal execution management, we plan to carry out this year's budget as planned without any setbacks to respond to the possibility of an economic slowdown."

Looking at the total expenditure progress rates for the third quarter (as of the end of September) over the past three years, they were 81.2% in 2019, 78.4% in 2020, and 78% in 2021, respectively. This year's total expenditure progress rate falls short of these levels. In particular, the execution rate of 44 price stabilization projects totaling 5.3 trillion KRW, which the government prepared to stabilize prices, stood at 71.6% as of the end of September, failing to meet the total expenditure growth rate.

Vice Minister Choi said, "We will establish an execution inspection system by ministry and prepare a fourth-quarter execution plan," adding, "We plan to select key projects with sluggish execution (up to 40 projects, totaling about 36 trillion KRW) and conduct special inspections and management of the execution status for each project." He further stated, "For the projects subject to management under this year's supplementary budget, we plan to complete more than 99% of execution by the end of the year through close management of each project, excluding unavoidable carryovers due to project characteristics."

Meanwhile, Vice Minister Choi described the recent economic situation as a "complex economic crisis" where concerns about economic slowdown persist amid high inflation, diagnosing that "due to the acceleration of interest rate hikes by major countries and the prolonged Russia-Ukraine war, external conditions have worsened, resulting in high uncertainty in financial markets and the real economy."

He added, "The government plans to continue promoting the execution management of livelihood stabilization projects prepared so far to promptly stabilize the livelihoods of socially vulnerable groups and the general public, in parallel with responding to downside economic risks by mobilizing all available resources this year."

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