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Finance

Government to spend over W26tr on housing stabilization

Financial Minister Hong Nam-ki speaks during a meeting on emergency economic responses held at the government complex in Seoul, Wednesday. (Yonhap)
Financial Minister Hong Nam-ki speaks during a meeting on emergency economic responses held at the government complex in Seoul, Wednesday. (Yonhap)
The government will spend over 26 trillion won ($23.9 billion) to develop new towns and build infrastructure in the first half of the year in a bid to curb soaring housing prices, the Finance Ministry said on Wednesday.

Finance Minister Hong Nam-ki unveiled detailed plans for a government-led 110 trillion won investment project program that will be carried out throughout the year by public agencies, state-run firms and private companies.

“The investment project will center on housing stabilization, the Korean New Deal and fostering new industries,” Hong said at a meeting on emergency economic responses.

The massive stimulus package will be carved up into three main sections -- 65 trillion won has been earmarked for public agencies to build affordable housing and nurture renewable energy sectors, 17.3 trillion won for funding private sector-led projects and 28 trillion won for infrastructure in emerging business sectors.

Of the amount set aside for public investment, the government will front-load 34 trillion won in the first six months mostly towards social overhead capital projects and energy sectors.

Alarmed by steeply rising apartment prices and the shortage of supply in Seoul and its surrounding cities, some 26.4 trillion won will be injected to build new towns in Incheon, a city bordering Seoul and Hanam, a city in Gyeonggi Province. The construction of a railroad linking Pohang and Samcheok in Gangwon Province as well as a highway connecting Hamyang County in South Gyeongsang Province and the Ulsan Metropolitan City will be included in the SOC project.

The plan came as President Moon Jae-in singled out housing market stability as a “crucial policy task” and vowed to map out additional measures to curb hikes in home prices and rent on Tuesday.

Stung by the protracted coronavirus outbreak, the country has scrambled to launch a massive government-led program to foster growth in new tech industries and to help the country transition into a net-zero emissions economy.

As a part of President Moon Jae-in’s New Deal program, led by the digital and green pillars, the government will invest 2.7 trillion won in renewable energy and green remodeling projects.

Under the digital New Deal program, a total of 7.6 trillion won will be poured into developing technologies based on data, networks and artificial intelligence, such as self-driving cars and smart factories.

The government plans to inject 58.2 trillion won into the program and create around 900,000 jobs by 2025.

By Park Han-na (hnpark@heraldcorp.com)
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