By Kim Jae-won
Finance minister Choi Kyung-hwan said Thursday the government will increase its budget for military spending next year to beef up defense capabilities against North Korean provocations.
Choi said he will draw up an expansionary budget for next year that does not undermine fiscal soundness.
In a meeting with lawmakers from the ruling Saenuri Party, he said the government will use the increased defense budget to strengthen forces near the demilitarized zone (DMZ) and buy more anti-submarine weapons.
"We will increase investment in defense for forces near the DMZ as well as improving anti-submarine capability." His remarks came a few days after the two Koreas agreed to ease tensions at the border after they exchanged artillery fire near the DMZ last week. The South's forces also showed weakness in anti-submarine warfare, failing to keep track of the North's submarine fleet during the confrontation.
However, he did not disclose how much the government will add to the 2015 military budget of 37.5 trillion won. The new budget bill will be sent to the National Assembly next month.
The finance minister said he will also push forward projects that can expand ties with the North. He said efforts will be made to build a park near the DMZ and construct railways reconnecting Seoul and the North Korean port city of Wonsan ― key North Korean policies of President Park Geun-hye.
Choi said the government will take an expansionary fiscal policy for 2016 to keep growth alive, but did not disclose by how much the budget will be increased. Korea's 2015 budget was 376 trillion won with a supplementary budget of 12 trillion won.
Global investment banks have advised Korea to take a more aggressive stance in fiscal policy as Asia's fourth-largest economy is losing momentum and suffering from weak private consumption.
"While Korea's economy continues to underperform relative to its own past record, it is also struggling relative to most of its peers," said Mark Walton, an economist at BNP Paribas, in a report.
Walton said Korea continued to languish near the bottom of the emerging market pack in the unenviable position of having a purchasing managers' index below the breakeven level of 50.
Choi admitted that the government has been overly optimistic about growth forecasts in the past few years, saying measures will be taken to have a more conservative outlook, so as not to incur revenue shortfalls next year.
Higher growth projections have led government planners to anticipate more taxes, but underperformance has led to a drop in state earnings, which forced Seoul to ask lawmakers for an extra budget this year.
 |
Choi Kyung-hwan |
Choi said he will draw up an expansionary budget for next year that does not undermine fiscal soundness.
In a meeting with lawmakers from the ruling Saenuri Party, he said the government will use the increased defense budget to strengthen forces near the demilitarized zone (DMZ) and buy more anti-submarine weapons.
"We will increase investment in defense for forces near the DMZ as well as improving anti-submarine capability." His remarks came a few days after the two Koreas agreed to ease tensions at the border after they exchanged artillery fire near the DMZ last week. The South's forces also showed weakness in anti-submarine warfare, failing to keep track of the North's submarine fleet during the confrontation.
However, he did not disclose how much the government will add to the 2015 military budget of 37.5 trillion won. The new budget bill will be sent to the National Assembly next month.
The finance minister said he will also push forward projects that can expand ties with the North. He said efforts will be made to build a park near the DMZ and construct railways reconnecting Seoul and the North Korean port city of Wonsan ― key North Korean policies of President Park Geun-hye.
Choi said the government will take an expansionary fiscal policy for 2016 to keep growth alive, but did not disclose by how much the budget will be increased. Korea's 2015 budget was 376 trillion won with a supplementary budget of 12 trillion won.
Global investment banks have advised Korea to take a more aggressive stance in fiscal policy as Asia's fourth-largest economy is losing momentum and suffering from weak private consumption.
"While Korea's economy continues to underperform relative to its own past record, it is also struggling relative to most of its peers," said Mark Walton, an economist at BNP Paribas, in a report.
Walton said Korea continued to languish near the bottom of the emerging market pack in the unenviable position of having a purchasing managers' index below the breakeven level of 50.
Choi admitted that the government has been overly optimistic about growth forecasts in the past few years, saying measures will be taken to have a more conservative outlook, so as not to incur revenue shortfalls next year.
Higher growth projections have led government planners to anticipate more taxes, but underperformance has led to a drop in state earnings, which forced Seoul to ask lawmakers for an extra budget this year.
![[ANALYSIS] Tesla, BYD's price cuts unnerve LGES, Samsung, SK](https://img.koreatimes.co.kr/upload/thumbnailV2/b1cf8ba68d474cb69352bfe7ea9d14f0.jpg/dims/resize/178/optimize)
![[INTERVIEW] How ATEEZ achieved worldwide success](https://img.koreatimes.co.kr/upload/thumbnailV2/c7723b56dde94eb4b260950d368fe8fb.jpg/dims/resize/178/optimize)
