In the COVID era, fiscal tightening or expansion? Yoon says "Fiscal expansion is inevitable," Ahn says "Securing funds without borrowing"

by Park Joonyi

by Kim Youngwon

Published 21 Feb.2022 20:48(KST)

Lee Jae-myung of the Democratic Party of Korea, Ahn Cheol-soo of the People Party, Sim Sang-jung of the Justice Party, and Yoon Seok-youl of the People Power Party, the presidential candidates from both ruling and opposition parties, are posing ahead of the first debate hosted by the National Election Commission held at MBC in Mapo-gu, Seoul on the 21st. Photo by the National Assembly Press Photographers.

[Asia Economy Reporters Junyi Park and Youngwon Kim] Conservative opposition candidates showed differing positions on fiscal expansion and financial tightening. Yoon Seok-yeol, the presidential candidate of the People Power Party, stated that "we need to spend when times are tough," emphasizing the necessity of fiscal expansion during situations like the COVID-19 pandemic. In contrast, Ahn Cheol-soo, the presidential candidate of the People’s Party, warned against expansionary fiscal policy, asserting that "it is possible to secure resources without incurring debt."

Both candidates responded this way on the 21st during the ‘1st TV Debate’ hosted by the National Election Commission, addressing the topic of 'Economic Measures in the COVID-19 Era.' Candidate Yoon explained, "The current fiscal expansion is not artificial as I mentioned, but rather an unavoidable obligation under the law for COVID-19 loss compensation. Regarding interest rate hikes, globally, financial liquidity increased due to COVID-19 support, so even the U.S. is tapering and short-term interest rates are rising, making it inevitable for South Korea as well."

On the other hand, Candidate Ahn said, "It is abnormal to patch things up with supplementary budgets every time COVID-19 spreads anew," adding, "To secure fiscal soundness, we can overcome this without incurring debt by restructuring the existing budget to raise resources."