Hong Nam-ki "Considering '2nd Supplementary Budget' Formation... No Additional Deficit Bonds Issuance" (Update)

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Economy and Finance, is delivering opening remarks at the 'Meeting with Heads of Research Institutions and Investment Bank Experts' held on the 4th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Son Seon-hee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, has officially announced the review of the second supplementary budget (supplementary budget) formulation.

On the morning of the 4th, Deputy Prime Minister Hong held a 'Meeting with Heads of Major Research Institutes and Investment Bank Experts' at the Government Seoul Office and stated, "The government will devote all policy capabilities this year to achieve a 'complete economic recovery accompanied by employment recovery and strengthened inclusiveness,' and as part of supporting this, we will review additional fiscal reinforcement measures, namely the formulation of the second supplementary budget." This is the first time Deputy Prime Minister Hong has mentioned the second supplementary budget in an official setting.

Regarding the purpose of the supplementary budget formulation, Deputy Prime Minister Hong emphasized, "It will mainly focus on support measures for vulnerable and affected groups." This aligns with the government's previously advocated 'selective support' approach and is interpreted as drawing a line against discussions in the political sphere, mainly by the ruling party, about nationwide disaster relief payments and retroactive compensation for losses. Additionally, the supplementary budget is expected to include measures for ▲vaccine supply and inoculation disaster response ▲domestic demand and employment measures for the second half of the year.

For securing funds for the supplementary budget, considering fiscal soundness, it was stated that instead of borrowing more, the additional tax revenue secured in the first quarter will be utilized. Deputy Prime Minister Hong said, "This supplementary budget will basically utilize a significant portion of the additional tax revenue expected due to different economic recovery conditions from the original tax revenue forecast, additional tax revenue from the asset market sector, and an increase in contingent tax revenue, without issuing additional deficit bonds."