Gov't to hold fiscal policy meeting

SEOUL, May 22 (Yonhap) -- The government will hold a meeting this weekend to
discuss its long-term fiscal policy amid worries over a protracted economic
slowdown and a worsening budget balance, the finance ministry said Friday.
President Lee Myung-bak will chair the meeting Sunday to exchange opinions among
cabinet members on the nation's fiscal policy and budget allocation direction
until 2013, according to the Ministry of Strategy and Finance.
"As the global economic crisis will likely continue into 2010, the government
thinks that finances should also play a role in overcoming the crisis," Vice
Finance Minister Lee Young-geol told reporters. "It will also consider ways to
keep the nation's fiscal status balanced."
Detailed numbers in relation to the budget will not be announced after the
meeting, the vice minister said. However, based on the results of the discussion,
he said the government will provide a 2010 budget cap to each minister by the end
of May.
The meeting comes as anxiety is growing that South Korea's fiscal soundness could
worsen as the government has unveiled diverse stimulus measures including tax
cuts and expanded state spending to kick-start the economy hit hard by a
protracted global recession.
Last month, parliament endorsed a record 28.4 trillion won (US$23 billion) extra
budget in addition to the 284.5 trillion won annual budget for 2009. The
additional spending is mostly aimed at generating jobs and bolstering anemic
domestic demand.
In the first quarter, the government's balance sheet switched to a deficit of
12.4 trillion won from a 20.7 trillion won surplus a year earlier.
South Korea's economy is feared to lapse into a recession for the first time in
more than a decade. The government predicts minus 2 percent growth this year,
followed by plus 4 percent next year.
kokobj@yna.co.kr
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