South Korea has arranged another supersized budget – $422 billion – for 2020 to fend off recessionary risks as the economy is set for the smallest growth in a decade this year, earmarking a record 22.3 trillion won for social infrastructure projects to strengthen domestic demand and create jobs in the face of global trade uncertainties.

The spending bill was announced Thursday as President Moon Jae-in proposed a record 513.5 trillion won budget for fiscal 2020 to offset the downside economic risks. The government maintained its ultra-expansionary fiscal stance, raising the budget by another 9.3 percent from 2019 after the 9.7 percent hike in the previous year. SOC projects alone would be increased by 12.9 percent.

The budget proposal for balanced national development was raised by more than 2 trillion won. Funding for 15 projects – including the Saemangeum International Airport, Pyeongtaek-Osong railway and Gimcheon-Geoje railway – shot up to 187.8 billion won from this year’s 9.9 billion won.

Spending on new roads, airports and railways to help connect regional economies climbed to 8.64 trillion won from 7.7 trillion won. The budget for city rejuvenation projects was bumped up to 5.37 trillion won from 4.16 trillion won. Spending on maintenance and repair of aging infrastructure rose by 800 billion won to 3.91 trillion won.

The budget also pitches increased spending to improve road traffic, up from 152.3 billion won to 160.7 billion won, and to build intercity rail services, up from 650.7 billion won to 865.1 billion won.

The government plans to issue a record 60.2 trillion won in state bonds to finance the mega budget as next year’s revenue is expected to inch up 1.2 percent to 482 trillion won.

The proposal would be submitted to the National Assembly for approval on Sept. 3.

By Sohn Il-seon and Kim Hyo-jin

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