Korea to spend at least 60 percent of budget in first half amid economic fears

Korea's finance ministry said Wednesday it aims to spend at least 60 percent of the annual budget in the first half of 2023 amid the slowdown in exports and employment.

"Of the expenditure plan of 638.7 trillion won ($500 billion), we will seek to spend at least 60 percent, or 383.2 trillion won, in the first half," the Ministry of Economy and Finance said in a statement.

In late December, the National Assembly passed the government budget for 2023. The final package was down 314.2 billion won from the government proposal of 639.4 trillion won.

The spending plan came as Korea is anticipated to continue to face challenges in the first half amid weak exports and external uncertainties, although Asia's No. 4 economy may seek a rebound in the second half of 2023.

"We plan to prevent the shock from the finance and foreign exchange market weighing down on the real economy, and help the national economy maintain a stable growth," the ministry said.

The speedy execution of the budget is necessary as the country's exports are set to fall 4.5 percent on-year in 2023, compared with 6.6 percent growth tallied last year, it added.

Private consumption was also expected to grow at a narrower margin of 2.5 percent this year, compared with a 4.5 percent rise in 2022.

Amid the growing concerns over a slowdown in the local job market, the finance ministry said it plans to hire 1.04 million vulnerable people and offer them subsidized jobs this year, with 90 percent of them set to be created through June.

The total number marks a rise of 14,000 jobs from the previous year.

The Korean job market, which stayed strong throughout 2022 despite the central bank's aggressive rate hikes on the post-pandemic recovery, is widely anticipated to lose steam this year.

The ministry earlier expected the country to add a net 100,000 additional jobs in 2023, sharply down from the growth of 810,000 tallied in 2022.

Yonhap