SEOUL: South Korea said it will tighten government spending in order to slow an increase in its debt and keep the particular debt-to-GDP ratio from mid-50 per cent by 2027, following many years of massive stimulus measures that have weakened the country’s fiscal situation.
Its finance ministry said that the government will cut the ratio of fiscal debt to GDP to some pre-pandemic level of a few per cent or lower from about five per cent estimated for this year, as it released the new administration’s fiscal policy plan on Thurs (Jul 7).
The government will normalise COVID-19-related expenditures, market off unnecessary property held by public enterprises, manage its employment quota plus salary plans more strictly, among other measures, according to the program.
South Korea’s debt-to-GDP ratio increased to 50 % this year from thirty six per cent in 2017 as the country released various stimulus actions, such as cash hand-outs, to boost the economy’s recovery from the outbreak.
The ministry said it will make a new fiscal principle based on the plan simply by early September and put it into impact as soon as the legislation process is complete.
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