S.Korea offers record budget for 2020 to boost growth, tackle trade spat with Japan

Source: Xinhua| 2019-08-29 17:04:20|Editor: Shi Yinglun
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SEOUL, Aug. 29 (Xinhua) -- South Korea on Thursday offered a record yearly budget for next year to boost economic growth and tackle the effect from trade spat with Japan.

The Ministry of Economy and Finance said the 2020 budget was set at 513.5 trillion won (422 billion U.S. dollars), up 9.3 percent from this year's budget and the biggest-ever fiscal spending.

This year's budget of 469.6 trillion won (386 billion U.S. dollars) was up 9.7 percent from the previous year.

The budget plan was scheduled to be submitted next week to the National Assembly for approval, of which the deadline is Dec. 2.

Next year's expansionary budget plan came amid the global trade dispute, which worsened the world trade and hit hard the export-driven South Korean economy. South Korea's export kept sliding for the eighth consecutive month to July.

Adding to the uncertainty, Japan tightened regulations last month over its export to South Korea of three materials vital to produce memory chips and display panels, which is the mainstay of the South Korean export.

Early this month, Japan dropped South Korea off its whitelist of trusted trading partners, which are given preferential export procedure. In response, Seoul also removed Tokyo from its whitelist of trusted export partners.

Minister of Economy and Finance Hong Nam-ki, who doubles as deputy prime minister for economic affairs, told in a press briefing that next year's budget would be much more expansionary than this year, as getting back the economy into a growth track with the active fiscal spending is of much help over the long run.

Hong said it would not be easy for the economy to meet the government's growth target range of 2.4-2.5 percent this year, which was revised down from the previous forecast to 2.6-2.7 percent.

The country's real gross domestic product (GDP), adjusted for inflation, expanded 1.1 percent in the second quarter on a quarterly basis, after surprisingly skidding 0.4 percent in the first quarter.