"Urgent Need for Increased SOC Budget Next Year"... Construction Industry on Alert for National Assembly Budget Review

[Image source=Yonhap News]

[Asia Economy Reporter Cha Wanyong] The construction industry's attention is turning to the National Assembly as the review of next year's SOC (Social Overhead Capital) budget is set to begin in earnest. The construction sector insists that expanding the SOC budget is crucial to overcoming the recent economic slowdown and promoting balanced regional development.

According to the construction industry on the 10th, the National Assembly's Special Committee on Budget and Accounts will start reviewing the economic ministries' budget proposals submitted by the government for next year from today until the 11th. This includes the Ministry of Land, Infrastructure and Transport's budget review. From the 17th, the Budget Adjustment Subcommittee, which examines increases and decreases in the budget, will commence full-scale activities.

Earlier, in the budget proposal announced on August 30, the government emphasized the need for "sound fiscal management" and set the SOC budget at 25.1 trillion won, a reduction of 2.9 trillion won (10.4%) from this year's 28 trillion won. In response, the construction industry has requested the National Assembly to expand the budget, stressing that government investment will be important after the first half of next year due to the increasing possibility of economic contraction.

The construction industry collectively agrees that missing the optimal timing for SOC investment can increase social costs such as public inconvenience and productivity decline, which could lead to even greater fiscal burdens, especially amid concerns of stagflation, making the expansion of the SOC budget essential.

The Construction Industry Research Institute recently stated in a report that achieving next year's economic growth rate of 2.5% requires SOC investment of 58 trillion won, with more than 32 trillion won needing to be allocated from the government budget.

The institute emphasized, "Although the SOC-related budget has been steadily increasing, it is insufficient to achieve an economic growth rate of 2.5%. The government's spending cuts could reduce its capacity to respond to changes in the economic environment, so maintaining an appropriate level of SOC investment is necessary."

A construction industry official said, "Missing the optimal timing for SOC investment can increase social costs such as public inconvenience and productivity decline, which could lead to even greater fiscal burdens. Especially since the global economy is unstable due to high oil prices, rising interest rates, and wars, expanding the SOC budget is urgently needed."

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