By Lee Hyo-sik
Staff Reporter
Lower fiscal spending in the year's first half failed to provide much of a boost to the slowing economy, as high oil and raw material prices continued to depress domestic demand and investment.
Questions are being raised over government spending efficiency in the wake of a supplementary budget plan for 4.8 trillion won to stimulate domestic demand, despite failure to properly execute approved fiscal expenditures.
The Ministry of Strategy and Finance said Monday that the government spent 109 trillion won in the first six months of the year, 95.4 percent of the allocated budget of 114.3 trillion won. Budget spending in general accounts is 182.8 trillion won this year and expenditures on state funds 74.5 trillion won.
State-invested enterprises used 93.6 percent of the drafted budget in the first half as Korea Land Corp. and the Korea National Housing Corp. failed to execute a large portion of their allocated funds. They faced an array of worsening business difficulties amid the real estate slump, including frequent disputes over private land compensation for state housing projects.
But a number of state funds spent more than their initial budgets. The National Housing Fund spent 18.8 percent more to provide the low-income bracket with more housing loans. Other state funds responsible for assisting small and medium-size firms also overspent to financially aid small companies suffering from worsening economic conditions.
The government spent 12.9 trillion won in the first half, more than its allotted budget of 11.5 trillion won. The money was used to implement state projects aimed to help stabilize the livelihood of low-income families. Another 1.5 trillion won went to help the jobless find work, less than the allocated 1.6 trillion won.
An additional 4.6 trillion won went to public companies to have them expand infrastructure investments. This was intended to help construction firms facing deteriorating business conditions amid the sluggish property market.
Korea Expressway Corp. and 14 other public firms will spend 1.3 trillion won in the third quarter and their remaining 3.3 trillion won in the fourth. A ministry official said fiscal spending in the latter half of the year will be closely monitored to ensure state funds are being properly spent.