Gov’t vows fast and strong economic recovery with expansionary spending

Jun 29, 2021, 09:16 am

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President Moon Jae-in speaks during an expanded meeting with economy-related ministers on the direction of economic policy at Cheong Wa Dae on June 28, 2021./ Source: Yonhap

AsiaToday reporter Cho Sang-eun

The South Korean government has shown confidence in ‘fast and strong economic recovery’ in the second half of this year.

It presented the target figures for the achievement of macroeconomic policies, such as economic growth of over 4 percent, employment recovery, and exports exceeding $600 billion.

“The second half of this year is an important period in which the economy should recover swiftly along with a return to normalcy through the herd immunity,” President Moon Jae-in said during an expanded meeting with economy-related ministers on the direction of economic policy on Monday.

The key to the government’s economic policy direction for the second half of 2021 is to resolve the gap and inequality caused by the pandemic by recovering the domestic economy through expansionary fiscal management.

In this regard, the government is planning a secondary supplementary budget by actively utilizing the surplus of tax revenues expected this year.

“The second extra budget should be pushed forward quickly so that excess tax revenue, which is expected to exceed 30 trillion won, can be used to further boost economic vitality and support the lives of people in need,” Moon said.

To shore up domestic consumption, the government plans to set up a new cash-back program and develop products such as nonlending tourist flights.

The government intends to strengthen the virtuous cycle structure of recovery of domestic economy that leads to job creation.

“We need to execute bold measures that will encourage spending by supporting low- and middle-income people,” Moon said. “We need to revitalize the domestic market and especially service industry, which are highly effective in creating jobs,” he stressed.

Creating more than 150,000 additional jobs in four major areas, including vaccine prevention and safety response, is also in line with the government’s policy.

Ultimately, it aims to achieve a “complete recovery” in which economic recovery is reached to vulnerable groups.

“As we all took part in recovering the economy, the fruits should be shared by everyone to achieve a ‘complete recovery’,” the president said. “The most important role of the government at this time is to correct the inequality and injustice in the market, which tends to grow in times of crisis.”

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