South Korea to spend $363 billion in 2015 to counter economic crisis.
In order to cushion South Korean economy from the global economic crisis and slump in domestic demand, the country has planned to spend $363 billion in 2015, as per a statement by finance ministry on September . This increase of 20.2 trillion Won in budget has been the highest since 2009 and will be spent in expanding the deficit to 2.1 percent of the gross domestic product (GDP) next year.
The fiscal spending by South Korea will grow by an average of 4.7 percent each year for the next three years. The government also plans to spend 115.5 trillion won, which is nearly one-third of its total budget, on health, jobs and welfare. This will be the highest ever allocated to this category.
Spending to spur job creation will increase by 7.6 percent. Even though the country’s unemployment rate of 3.5 percent is one of the lowest among medium to high-income economies, the number of full-time, quality jobs available has been on a decline.
The finance ministry has stated that South Korea’s sovereign debt would rise to 35.7 percent of the annual GDP in 2015 from an estimated 35.1 percent in 2014. The government might also sell up to 43.2 trillion Won worth of treasury bonds in 2015 to fund the fiscal deficit. It is reported to also have plans to sell up to $700 million in foreign-currency bonds next year to mostly pay for the current debt of €500 million due to mature next year.
Photo Credits: Business Korea