Government is well placed to manage fiscal soundness: Minister of Finance

0





Korea's time


Settings


Government is well placed to manage fiscal soundness: Minister of Finance


Deputy Prime Minister and Finance Minister Hong Nam-ki, right, attends a virtual meeting with Fitch Ratings officials at the Sejong government compound on July 5.  Courtesy of the Ministry of the Economy and Finance
Deputy Premier and Finance Minister Hong Nam-ki, right, attends a virtual meeting with Fitch Ratings officials at the Sejong government compound on July 5. Courtesy of the Ministry of the Economy and Finance


Hong says economy is recovering faster
By Lee Kyung-min

Deputy Prime Minister and Minister of Finance Hong Nam-ki reaffirmed that Korea will continue its rigorous management of public debt, as part of its long-term goal of maintaining fiscal strength, the finance ministry said on Tuesday.

The comments were made at the ministry’s annual meeting with Fitch Ratings, a global credit rating agency.

The top politician stressed that the level of Korean government debt to GDP will be reduced, as the country’s second supplementary budget of 33 trillion won ($ 29.1 billion) will be drawn without funding from the government. debt and part of the debt has been paid off.

Continued efforts will be made, he added, to comply with the fiscal solidity measures to be applied in 2025, defined as the search for a balance between the public debt / GDP ratio kept below 60% and the deficit. the country’s consolidated budget limited to more than 3% of the country’s GDP.

This is in line with the ministry’s policy outlined last year, according to which a deficit of up to 4% of GDP will be allowed in limited situations following an economic crisis. An economic crisis is defined by a sharp slowdown, illustrated by a drop in industrial production and data on employment.

The ratio of Korean public debt to GDP with the second supplementary budget taken into account has been revised this year to 47.2% from 48.2%. The forecasts have been revised to 49.9% against 52.3% for 2022, to 52.3% against 56.1% for 2023 and to 54.7% against 59.7 for 2024.

Hong said that although the number of new COVID-19 infections has increased recently, it is under manageable control compared to other countries and does not pose a significant risk to the outlook for economic recovery.

The finance minister said Korea’s economy is recovering faster and stronger than expected, driven by robust exports and investment, which is why he predicts the country will grow 4.2 percent this year.

Data from the Ministry of Trade, Industry and Energy showed that Korea’s exports reached $ 54.8 billion in June, up 39.7% year-on-year, the volume of exports on a monthly basis increasing for eight consecutive months.

The monthly figure topped the $ 50 billion mark in the past four months, bringing the country’s exports to more than 300 billion won in the first six months of this year, up 26.1 percent from to the previous year.

The second supplementary budget, he said, will focus on ways to bring consumption and employment back to pre-crisis levels.

Maintaining strict social distancing rules for another week will not result in another round of assembly bans, reduced opening hours, or bans on movement.

Fitch is expected to announce Korea’s credit rating by August or September at the latest, after concluding its annual schedule of consultations with the country’s ministries and public organizations by August 8.

Currently, Fitch’s credit rating for Korea is AA-, and its rating outlook is “stable”.


















Share.

About Author

Leave A Reply