Welfare likely to take bigger bite of budgetSeoul’s welfare spending is expected to rise over the next few years even when excluding the estimated costs incurred by pledges political parties are ramping up ahead of the presidential election, data showed yesterday.
Mandatory spending in the social welfare sector is likely to reach 62.9 trillion won ($56.5 billion) in 2013, up from 59 trillion won this year, according to the data by the Ministry of Strategy and Finance. The figures were calculated on the basis of current laws and policies.
Korea is scheduled to hold its presidential race in December, with three candidates vying to become the next leader of Asia’s fourth-largest economy.
The figure is expected to reach 72.6 trillion won in 2015 and 78.8 trillion won in 2016, growing at an annual 7.5 percent rate. Mandatory spending refers to the amount the government is subject to spend under related regulations.
Since the cost and range of the spending are set, it is difficult for the government to make cutbacks.
An annual growth rate of 10.8 percent was forecast for the public pension sector as the number of recipients has risen in line with the rapidly graying population.
Spending to support low-income earners is expected to jump 4.2 percent each year if the number of recipients stays at the current level of 1.43 million and annual inflation hovers around 3 percent.
Health insurance-related spending is likely to increase 8.8 percent on average during the cited period, according to the data.
The total amount of mandatory spending is expected to rise 7.3 percent to 201.1 trillion won in 2016, compared with 151.9 trillion won this year.