Korea plans to up spending by 2.8 percent for 2024, lowest since 2005

The Yoon Suk Yeol administration keeps tightening its belt by capping next year’s budget growth to the lowest level since 2005 as it chooses austerity over economic stimulus.

The government set the expenditure at 656.9 trillion won ($495.2 billion), up 2.8 percent from the previous year.

Finance Minister Choo Kyung-ho said that the growth represents the slimmest since 2005, when the government changed how the data is compiled.

“This reflects the government’s commitment to maintaining fiscal soundness,” Choo said.

“We are well aware of the fact that some people advocate extended spending by the government to shore up the economy. But we need to stay firm and adamant on normalizing fiscal state and ensuring fiscal soundness,” he added.

Korea’s national debt — the total amount of money the government has borrowed — broke 1,000 trillion won ($756 million) for the first time last year to record 1,067.7 trillion won.

Despite a minor growth in spending, the government increased the budget for low-income households by 13.2 percent to increase monthly allowances for them to 213,000 won.

It will allocate a total of 4.4 trillion won for research and development of four key industries, including AI, bio, cyber and digital platform businesses, up 22.2 percent from this year’s.

The budget proposal was passed in a Cabinet meeting on Tuesday and submitted to the National Assembly on Sept. 1 for a final vote.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]