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| Deputy Prime Minister Hong Nam-ki speaks during a government meeting for economic vitality and innovative growth at the Export-Import Bank of Korea headquarters in Seoul, Wednesday. / Courtesy of Ministry of Economy and Finance |
By Jhoo Dong-chan
The government will inject 4.7 trillion won ($3.89 billion) to strengthen the nation's development of "future technologies" next year, the finance minister said Wednesday. Future technologies include big data, fifth-generation (5G) networks, artificial intelligence (AI), future cars and bio-health.
"The government plans to spend a combined 1.7 trillion won on the nation's big data, AI and 5G network services next year. Another 3 trillion won will be invested in system semiconductors, bio-health and future car technology," Deputy Prime Minister and Finance Minister Hong Nam-ki said during a government meeting. It was convened to discuss measures to enhance economic vitality and innovative growth at the Export-Import Bank of Korea headquarters in Seoul.
"The planned investment will, at first, contribute to infrastructure for the nation's data, 5G network and AI projects. The government will then financially support system semiconductors, bio-health tech firms and carmakers to help with their innovative growth."
Under the decision, Hong added the government will support domestic hospitals' efforts to establish a big patient data platform while providing subsidies for domestic firms' R&D projects for electric and hydrogen car technologies.
Last month, President Moon Jae-in announced a plan to expand the government's support for innovative growth in the nation's manufacturing sector, especially by nurturing globally competitive startups, as part of countermeasures against Tokyo's move to curb its exports of materials vital for semiconductor production.
Following Moon's announcement, the government said last week it will speed up the spending of 16.5 trillion won worth of social overhead capital to build infrastructure in the second half of the year. The government will also ease related regulations to boost the nation's construction sector.
Concerns have grown over the government's massive spending, but experts said expenditure is a must under the current economic situation.
"The government spending is aimed at boosting the nation's worsening domestic demand," Yonsei University economist Sung Tae-yoon said.
"A further expansion of its fiscal deficit could be an issue, but spending is a must at the moment. The government should monitor further developments."
According to the Ministry of Economy and Finance, Korea's consolidated public fiscal balance, which is one of the key barometers measuring the nation's financial soundness, posted a deficit of 38.5 trillion won ($3.16 billion) between January and June.
This was the worst figure since the ministry began collecting related data in 2011.
Korea's exports declined 11 percent in July compared to the previous month, continuing a downward trend. The nation's trade surplus stood at $2.44 billion in July, down $6.89 billion from a year ago.
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