South Korea on Tuesday proposed a record-high government budget for 2021 to bolster economic recovery amid uncertainty over the Covid-19 pandemic, according to the Ministry of Economy and Finance.
Proposal for the 2021 fiscal budget was set at 555.8 trillion won ($469 billion), 8.5 per cent higher than this year’s budget, Xinhua news agency.
The record-high budget was unveiled to help reinvigorate the lackluster economy, caused by the pandemic.
In late August, the country’s central bank expected the real gross domestic product (GDP) to contract 1.3 per cent this year.
It was down from the estimate of a 0.2-per cent fall announced in May.
The growth rate of the 2021 fiscal budget was lower than hikes of 9.5 per cent in 2019 and 9.1 per cent in 2020 each.
Because of the record-high budget, the ratio of national debt to GDP was estimated to rise to 46.7 per cent in 2021 from this year’s 43.5 per cent.
The government will submit the 2021 budget proposal to the National Assembly on Thursday for approval.