The government and the ruling party are considering hiking the 2015 budget by about 5 percent, a move apparently aimed at boosting the economy while keeping the country's fiscal status sound.
The expansion is lower than the 6 percent increase requested by government ministries and agencies. It is also much lower than the about 10 percent increase in spending that experts have expected since the government unveiled its economy stimulus measures in July.
"We were briefed on the government's stance on by how much it intends to increase its budget for next year during talks between the ruling party and the government last Tuesday," said a lawmaker of the ruling Saenuri Party close to the matter. "The final figures are highly likely to be determined in the upcoming talks.
"We are now considering raising the 2015 budget by about 5 percent compared with this year by taking into consideration economic stimulus, revenue situations and fiscal balance," he added.
If the budget grows 5 percent next year, the 2015 budget will be around 373.59 trillion won (US$368.4 billion). It would be lower than the 377 trillion won that government ministries and agencies requested in June.
The government has said that it will continue its expansionary macroeconomic policy until the economy shows signs of marked recovery. In July, it unveiled more than 40 trillion won worth of stimulus measures to grow the economy.
The lower-than-expected growth in budget might be reflecting the concerns among lawmakers that fiscal health could be compromised due to increasing government spending amid a slowing economy and dwindling tax revenues.
"The party and the government share the same view on the need for expansionary fiscal stance, but considering the current revenue situations, we cannot expand next year's budget without limits ...
We expect the budget to increase around 5 percent next year," another ruling party lawmaker said. (Yonhap)