Presidential Office "Doesn't exclude supplementary budget" vs. Ministry of Economy and Finance "Doesn't review supplementary budget"...fiscal policy mismatches

over the supplementary budget...The Presidential Office and the Ministry of Information and Communication are 'offbeat'
This year's 30 trillion tax revenue funk...Mobilization of funds, etc. without issuance of government bonds
Presidential Office mentions possibility of drawing up extra budget
Fiscal Authority's Ministry of Economy and Finance, "We will not consider drawing up an extra budget next year."

[Anchor]
When the presidential office said it did not exclude the active role of finance, including the extra budget, the Ministry of Strategy and Finance, the financial authority, made an official statement that it was not considering setting up an extra budget.

Economic leaders are at odds over fiscal policies that have a significant impact on people's livelihoods and economic growth.

Reporter Oh In-seok on the report.

[Reporter]
Prime Minister Han Duck-soo, who earlier this month delivered a speech on behalf of Yoon Suk Yeol's president on next year's budget, said he has focused his capabilities on establishing a market economy and sound fiscal stance over the past two and a half years.

[Han Deok-soo / Prime Minister (last 4th): The government prepared next year's budget plan by considering efficient fiscal management under the unwavering sound fiscal stance.]

In the wake of the 30 trillion won tax slump this year, the government announced that it would use external funds and housing and urban funds to make up for the deficit, not issuing government bonds.

The intention is to minimize the burden on future generations by curbing the issuance of deficit government bonds that increase national debt.

However, with next year's budget bill currently being deliberated by the National Assembly, the president's office has taken out a card to organize an additional budget.

A senior presidential office official said he did not rule out the active role of finance, including an extra budget, but said the timing had not been set with an extra budget early next year.

Recently, the International Monetary Fund (IMF) lowered its forecast for the nation's economic growth rate next year by 0.2 percentage points from 2.2 percent to 2 percent in a month, saying the downside risk to the Korean economy has increased.

The Korea Development Institute (KDI) also cut its growth forecast for this year by 0.3 percentage points to 2.2 percent, and also cut its growth forecast for next year by 0.1 percentage point to 2 percent, saying the recovery of domestic demand is being delayed more than expected.

Analysts say the president's office is considering active fiscal cards due to sluggish domestic demand and slowing economic growth.

However, the Ministry of Strategy and Finance, the financial authority, immediately issued an official press release and refuted, saying, "We are not considering setting up an extra budget for next year."

An official from the Ministry of Economy and Finance said that next year's budget is currently being reviewed by the National Assembly, and mentioning the supplementary budget is out of the blue.

It added that even if the budget bill is finalized, it is not currently known whether the economic situation meets the national fiscal law, which is a requirement for supplemental arrangements.

As sluggish domestic demand is prolonged and there is a possibility of slowing exports next year due to the launch of the second Trump administration, there are also calls for a shift in fiscal policy to active government spending.

[Jungsik Kim / Honorary Professor of Economics at Yonsei University: Low-income and vulnerable groups are the most affected by the sluggish domestic demand, so it is necessary to spend money to create jobs for the vulnerable and help the vulnerable]

On the other hand, the IMF recommended that an active sound fiscal stance be needed to cope with long-term spending pressures such as aging, and the KDI also said next year's budget is considered an appropriate policy stance in the current situation.

This is YTN Oh In-seok.



Video editing: Han Soo-min
Design: Lee Ga-eun