Issuance Now Allowed for Urgent Fiscal Needs
Ministry of the Interior and Safety Introduces Safeguards Against Indiscriminate Bond Issuance
On October 26, the National Assembly held a plenary session and passed a partial amendment to the Local Finance Act, which expands the scope of local government bonds to allow their issuance for urgent fiscal needs.
At the plenary session, the amendment to the Local Finance Act was approved with 189 votes in favor, 42 against, and 24 abstentions out of 255 members present.
Previously, the Local Finance Act limited the issuance of local government bonds to large-scale investment projects and disaster or calamity recovery projects. As a result, local governments faced limitations in raising funds through bond issuance when urgent fiscal needs arose due to unforeseen large-scale lawsuits or sudden economic downturns.
Meanwhile, the Ministry of the Interior and Safety announced that, following the amendment, it will operate the local government bond issuance limit system and the local fiscal crisis management system more strictly to ensure sound management of local government debt and prevent fiscal deterioration caused by indiscriminate bond issuance by local governments.
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