[Yoon Administration Supplementary Budget] Choo Kyung-ho: "Supplementary Budget Prepared Without National Debt Issuance... Minimizing Inflation Impact"

Government Announces Additional Supplementary Budget of 59.4 Trillion Won
"Supplementary Budget Without National Debt Issuance... Minimizing Impact on Inflation and Interest Rates"
"Prepared for Immediate Execution Once Supplementary Budget is Approved by the National Assembly"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is holding a joint briefing with related ministers on the second supplementary budget for 2022 at the government Seoul office briefing room on the 12th. From the left, Cho Joo-hyun, Vice Minister of the Ministry of SMEs and Startups; Choi Sang-dae, 2nd Vice Minister of the Ministry of Economy and Finance; Deputy Prime Minister Choo Kyung-ho; Jeong Hwang-geun, Minister of Agriculture, Food and Rural Affairs; Jo Gyu-hong, 1st Vice Minister of the Ministry of Health and Welfare.
[Photo by Yonhap News]

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated regarding the supplementary budget of 59.4 trillion won, "The supplementary budget was prepared without additional government bond issuance," and added that the impact on interest rates and inflation will be minimized.

At the second joint government briefing on the supplementary budget held at the Government Seoul Office on the 12th, Deputy Prime Minister Choo said, "We judge that this supplementary budget will have minimal impact on macroeconomic factors such as interest rates and inflation," and "The national debt ratio is expected to improve from 50.1% to 49.6% of the Gross Domestic Product (GDP)."

According to the Ministry of Economy and Finance, the government prepared a supplementary budget plan of 59.4 trillion won on the same day. Deputy Prime Minister Choo explained, "Since 23 trillion won is included for transfers to local governments according to relevant laws, the actual general expenditure allocated by the government for supporting small business owners, strengthening quarantine measures, and stabilizing livelihoods amounts to a total of 36.4 trillion won."

Of the 36.4 trillion won, the government plans to save 15.1 trillion won from the existing budget and finance the remaining 21.3 trillion won by utilizing the expected excess tax revenue based on the revised tax revenue forecast for this year.

Deputy Prime Minister Choo said, "Based on national tax performance up to March this year, discussions with tax collection agencies and external experts estimated a total excess tax revenue of 53.3 trillion won due to changes in major macro variables and favorable corporate performance last year," adding, "Of this, 21.3 trillion won will be used as funding for this supplementary budget, including support for small business owners, while the remaining excess tax revenue will be allocated as 23 trillion won to strengthen local finances and 9 trillion won to reduce government bonds."

Deputy Prime Minister Choo explained that this supplementary budget plan was prepared focusing on three pillars: ▶ fair and full compensation for losses to small business owners ▶ reinforcement of quarantine needs and support for the transition of the medical system ▶ livelihood and price stabilization.

He emphasized, "More than 70% of the 36.4 trillion won general expenditure in this supplementary budget, amounting to 26.3 trillion won, will be concentrated on supporting damages to small business owners to ensure full compensation," and "6.1 trillion won will be allocated to strengthen quarantine needs and support the transition to the general medical system."

He continued, "To alleviate the difficulties faced by ordinary citizens due to recent sharp price increases, 3.1 trillion won will be invested in livelihood and price stabilization," and added, "The government will thoroughly prepare in advance so that the supplementary budget can be executed immediately once it is approved by the National Assembly."