Gov' t to keep pump-priming measures in 2010 budget

SEOUL, April 28 (Yonhap) -- The government will continue to take stimulus measures in 2010 to ease an economic downturn by creating jobs, boosting research activities and finding new growth engines, officials said Tuesday.

In a Cabinet meeting chaired by President Lee Myung-bak to set the guidelines for
next year's budget, ministers also agreed to work hard to achieve a sound fiscal
status by streamlining the spending structure to ensure that money is used where
it is most needed.
"Next year's budget will be drawn up to bring our economy back on track and help
the nation preempt opportunities that could come along after the current crisis
ends," Vice Finance Minister Lee Young-geol told a press conference.
"Priority will also be placed on keeping the nation's fiscal status stable as it
has been undermined amid efforts to get over the economic crisis," he added.
The finance ministry said that it will allocate much of its spending next year to
create jobs and strengthen growth potential by supporting research activities,
enhancing the service sector's competitiveness, and helping eco-friendly and
other industries that can spur growth in coming generations.
In a bid to enhance the overall efficiency in expenditure, the ministry added
that it will step up efforts to streamline its spending structure so that money
ends up where it is most in need.
The government will deliver the budget guidelines by the end of April to
ministries, each of which is expected to present its own budget request to the
finance ministry by June 30. Figures on growth targets and a broad estimate on
the budget for next year have yet to be unveiled.
In addition to the 284.5 trillion won annual budget for 2008, the government drew
up a 28.9 trillion won extra budget last month to stimulate the slumping economy.
The additional funds, to be secured primarily through debt sales, are under
deliberation in parliament.
South Korea's economy is expected to contract 2.4 percent this year, the first
minus growth in more than a decade, as the global recession is expected to dent
demand for goods at home and abroad, according to the latest prediction by the
central bank.
Experts worry that the expanded budget, the largest ever, will undermine the
nation's fiscal soundness by increasing borrowing amid declining income due to
the protracted economic downturn.
"Like this year, we assume the nation will face a fiscal deficit next year as
well," the vice finance minster said. "We will do our best to reduce the deficit
as much as possible by improving the overall spending structure."