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The government is moving ahead with its first major economic ministry reorganization in 17 years, separating the budget function from the Ministry of Economy and Finance (MOEF) and renaming it the Ministry of Finance and Economy (MOFE). While the shift aims to decentralize authority and strengthen strategic coordination between fiscal and financial policy, concerns remain that losing budgetary control could weaken policy momentum.

Under the plan, MOFE will focus on macroeconomics, fiscal policy, and taxation, while taking over domestic financial policymaking from the Financial Services Commission. Supporters say unifying fiscal and financial policy under one roof could improve consistency and efficiency. “If domestic and international finance are managed by the same ministry, there can be a strong synergy,” said Park Jin, professor at KDI School of Public Policy and Management.

The new Ministry of Planning and Budget, under the Prime Minister’s Office, will become the nation’s fiscal control tower, overseeing resource allocation and tackling long-term challenges such as low birth rates, climate change, and industrial restructuring. Some warn that placing budget authority under the prime minister could expose fiscal management to political influence, but experts argue the impact on fiscal health will be limited. “Even now, the ruling party has significant sway over budgets. The reorganization will not drastically change fiscal conditions,” said Kim Jeong-sik, emeritus professor of economics at Yonsei University.

Still, analysts caution that without budget authority, MOFE could see diminished leverage in coordinating policy, as was the case in past structures. Park countered that today’s policy-making depends more on facts and logic than on wielding budget power, and that MOFE can maintain momentum despite the change.