The South Korean central government has spent about half of this year’s original budget and nearly all of two extra budgets created in March and April by the end of May, said the finance ministry as it readies doubled third budget increase this month to prevent the economy falling deeper into a recession.

So far, 45 government ministries and 33 public institutions have executed 137.7 trillion won ($112.4 billion) or 44.7 percent of 307.8 trillion won set aside for major government-managed projects this year by the end of April. Total budget for 2020 was 512.5 trillion, a record size.

It has also doled out 8.9 trillion won or 89.7 percent of 9.9 trillion won from 11.7 trillion won worth of first extra budget that was approved by the National Assembly on March 17 by end of May, Ahn Il-hwan, vice finance minister briefed in an emergency public finance meeting on Tuesday.

Of the 14.3 trillion won in second supplementary budget passed in April, 13.3 trillion won or 93.6 percent has been used up by the end of May, with the bulk going to cover relief fund handouts to every household.

Ahn said that concerns are growing over growth contraction amid sharp plunge in exports in April and sluggish service sector having spillover effect on the manufacturing and employment sectors.

On Monday, the finance ministry estimated a growth of 0.1 percent for this year, a sharp cut from previous forecast of 2.4 percent, and warned of a contraction if not for stimuli.

The ruling party and government have agreed on a third supplementary budget in the scale of 30.7 trillion won.

The government will submit its third supplementary budget plan to the National Assembly this week to not just stabilize the economy for now but also excite growth for longer term.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]