The Ministry of Economy and Finance said Thursday that the government will increase the 2020 budget bill by nine.three percent to around 423-billion U.S. dollars.
It's the first time since the global financial crisis that the budget bill has seen an increase of nine percent for two consecutive years as part of efforts to boost the domestic economy.
In particular, the government showed its determination to counter Japan's export curbs on South Korea by fostering local production of strategic materials and items which will be backed by a 17.3 percent increase in the budget set aside for R&D.
"The 2020 budget bill has been drafted to be as expansionary as possible to show the government's strong determination to revitalize the domestic economy. We will invest heavily in new industries to help accelerate innovative growth and boost innovation across the economy."
The ministry expects next year's gross income to amount to nearly 397-billion dollars, up by 1.2 percent from this year.
To fund the spending increase despite an expected 0.9 percent decrease in national tax income, the government will issue the biggest ever deficit-covering bond of around 49.5 billion dollars.
"The South Korean economy needs a solution for a structural problem. But instead, using a financial solution to boost the economy can pile up national debt to a level that cannot be handled by the government and cannot be recovered, just like what happened in Japan."
The lion's share of next year's budget, around 149.6 billion dollars, is to be injected into the health, welfare, and labor sectors…from which 21.2 billion dollars will be used for solely labor.
Government spending in labor will be 21 percent higher than this year in an effort to expand labor market policies that reinforce worker's wage insurance and job training.
The trade ministry says it seeks to revitalize exports with a 27.5 percent increase, resulting in a largest ever 19.6 billion dollar budget for trade, industry and energy.
The budget proposal is to be submitted to the National Assembly next Tuesday for approval.
Hong Yoo, Arirang News.