Government to spend 65% of 2024 budget in H1

Deputy Prime Minsiter and Minister of Economy and Finance Choi Sang-mok speaks as he presides over an emergency meeting of economy-related ministers at Government Complex Seoul, Tuesday. Yonhap

The government will spend more than 65 percent of its 2024 fiscal budget in the first half of the year in a bid to boost demand and bolster people’s livelihoods, the country’s top economic policymaker said, Tuesday.

Of this year’s 656.62 trillion won ($493.32 billion) budget, spending in the first half of the year is estimated to be at 426.8 trillion won. It will be the highest amount to be administered in any January-June period of a corresponding year.

“High inflation and costly borrowing rates are making prospects blurry concerning the improvement of people’s livelihoods,” Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok said as he presided over an emergency meeting of economy-related ministers at Government Complex Seoul.

The minister stressed that the government is committed to try whatever it can to prop up the economic recovery, saying, “We will take follow-up measures for the 2024 economic policy directions.”

Choi’s remarks came as the high cost of living is causing households to tighten their spending.

The weakened spending power is a negative factor impacting the government’s path for economic revitalization, as private spending is the twin-engine of growth along with exports.

The 65 percent of annual fiscal spending will be mainly targeted toward welfare for the socially vulnerable, job creation and social infrastructure projects.

A total of 15.7 trillion won will be spent on social infrastructure projects in the January-June period.

The government plans to create more than 700,000 jobs, starting from the Lunar New Year (Feb. 9 to 12) moving forward.

Some 630,000 jobs will be created for seniors, while 40,000 will be related to rehabilitation projects and 35,000 will be related to elderly care.

Concerning welfare, the government will spend money to extend parental leave from the current 12 months to 18 months.

In addition, about 3.65 million low-income households will be exempted from increased electricity fees this year following a price hike.

To counter inflation in the lead-up to the Lunar New Year holidays, the government will inject 84 billion won in order to lower the prices of in-demand food items during the holidays.

They include fruit, vegetables, meat and eggs, which the government wants to bring down by 60 percent respectively.

Expressways will be toll-free during the Lunar New Year holidays too.

Meanwhile, the meeting on Tuesday also discussed measures to cope with rising marine shipping costs due to attacks on commercial vessels by the Iranian-backed Houthi rebels in the Red Sea.

The government decided to reroute four vessels on European routes to provide extra container space for Korean exporters in response to the crisis in the Red Sea.