Budget for 2014 front-loaded again

To follow through on its promise to jump-start the domestic economy, the government decided yesterday to spend more of the 2014 budget in the first half than in the second.

The cabinet approved front-loading 65.4 percent of the government’s annual budget in the first half of the year, the Ministry of Strategy and Finance announced yesterday.

Under the plan, the government will spend 40 percent of the 355.8 trillion won ($340 billion) budget in the first three months of the year and 25.4 percent in the following quarter, according to the ministry.

In the third quarter, 21.3 percent will be spent, and in the fourth quarter, 13.3 percent.

Even so, spending in the first half of 2014 will be the smallest since 2008.

From 2009 through 2012, with the exception of 2011, the Finance Ministry front-loaded more than 70 percent of the annual budget in the first six months.

Last year, it allocated 71.6 percent for the first half.

Some analysts think the government has sacrificed more balanced growth in the last few years.

By spending more than 70 percent in the first two quarters, the economy showed noticeable improvements in the beginning of the year but started losing steam as the end of the year approached. The relatively lighter front-loading was interpreted by some analysts as a mark of the government’s confidence in a solid economy.

The government earlier said in its economic policy for 2014 that it will maintain the current expansionary monetary and fiscal policies in the first half of the year to bolster anemic growth.

“This doesn’t mean the government is spending more because the first-half economic outlook is too bad,” said Kim Cheol-joo, director general for economic policy at the Finance Ministry. “We see pretty even and gradual growth throughout the year.”

As the government pledged, most of the spending will be dedicated to job creation and firming up the domestic market.

According to the final budget plan passed by lawmakers at 5:15 a.m. on Jan. 1, total revenue is set at 369.3 trillion won, down 1.4 trillion won from what the Finance Ministry calculated. Total expenditure was cut from the government’s original proposal by 1.9 trillion won to 355.8 trillion won.

BY SONG SU-HYUN [ssh@joongang.co.kr]