韩国经济增长放缓，财政支出扩大South Korean authorities are seeking to increase government spending next year to support the economy, and have promised to increase fiscal support for other growth industries such as semiconductors and South Korean pop music (K-Pop) entertainment.
According to the Futu Finance app, South Korean authorities are seeking to increase government spending next year to support the economy, and have promised to increase fiscal support for other growth industries such as semiconductors and South Korean pop music (K-Pop) entertainment.
South Korea's Ministry of Finance said in a statement on Tuesday that the South Korean government plans to spend 677.4 trillion Korean won ($512 billion) by 2025, an increase of 3.2% from this year's budget. In comparison, this year's budget increased by 2.8%.
South Korea's economic growth is slowing down, while fiscal spending is expanding.
The South Korean Ministry of Finance stated that the proposal to be submitted to the National Assembly includes providing 6.2 trillion Korean won in low-interest loans to semiconductor, battery, and biotechnology development companies.
In addition, a 2.9 trillion Korean won fund will be established to support South Korean pop music concerts and content creation, promote nuclear energy projects including small modular reactors, and provide guarantees for weapon exports. In recent years, these industries have become the driving force of South Korea's export-oriented economy.
Trade is the backbone of South Korea's economy, as the country relies on the global supply chain for essential products and raw materials due to a lack of natural resources. This year, the chip industry has been leading the export rebound, and South Korean authorities expect this momentum to continue into next year, but the economic growth rate may still slow to 2.2%, lower than the 2.6% growth rate in 2024.
At the same time, the Bank of Korea predicts that GDP growth next year will slow from this year's 2.4% to 2.1%.
South Korea is one of the countries with the lowest government debt burden among developed countries. According to the South Korean Ministry of Finance, if the budget proposal is approved, the debt-to-GDP ratio will increase from 47.4% this year to 48.3% next year. The South Korean government expects this ratio to reach around 50.5% by 2028.
According to the data from the International Monetary Fund (IMF), the average debt-to-GDP ratio in East Asia in 2024 is 109.6%, with Japan having the highest ratio at 254.6%.
