SEJONG, Jan. 26 (Korea Bizwire) – South Korea’s finance minister asked government ministries and agencies on Tuesday to make all-out efforts to frontload their budget spending in the first quarter to preemptively cope with rising economic uncertainties at home and abroad.
“The government is pushing forward with the frontloading of fiscal spending in the first quarter as the South Korean economy is expected to face challenges like contracted consumption, a slowdown in China and fast-falling oil prices,” Finance Minister and Deputy Prime Minister Yoo Il-ho was quoted as saying in a remark at the Cabinet meeting held in Seoul.
“I want all ministries and agencies to make all efforts to go through early budget spending in the first quarter.”
The Seoul government is planning to frontload its scheduled 2016 spending in the first quarter of this year to fuel the flagging economy, with additional investments by public agencies and pension funds.
It will spend 125 trillion won (US$104.3 billion) in the January-March period, up 8 trillion won from the same period last year, out of its 330.6 trillion won budget for 2016.
The first quarter is regarded as the most critical period for the 2016 economy due to a possible drop in consumption and exports, with the country’s 2015 growth posting a three-year low of 2.6 percent.
The temporary excise tax exemption program for cars and large consumer appliances was terminated at the end of last year, while weakening global demand stemming from China and oil-rich countries is weighing heavily on Asia’s fourth-largest economy.
Yoo called on the ministries to focus on spending in areas that will revitalize the economy including public works projects and government-led investment programs.
Earlier in the day, the Bank of Korea said South Korea’s economic growth cooled to 0.6 percent in the last quarter, dragging 2015′s full-year growth to a three-year low of 2.6 percent.’