{"id":2206284,"date":"2024-08-28T08:00:34","date_gmt":"2024-08-27T23:00:34","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206284"},"modified":"2024-08-27T15:28:34","modified_gmt":"2024-08-27T06:28:34","slug":"south-koreas-2025-budget-proposal-faces-political-and-economic-challenges","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/08\/south-koreas-2025-budget-proposal-faces-political-and-economic-challenges\/","title":{"rendered":"South Korea\u2019s 2025 budget proposal faces political and economic challenges"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">South Korea\u2019s Cabinet <\/span><a href=\"https:\/\/www.moef.go.kr\/nw\/nes\/detailNesDtaView.do?searchBbsId1=MOSFBBS_000000000028&amp;searchNttId1=MOSF_000000000070396&amp;menuNo=4010100\"><span style=\"font-weight: 400;\">approved<\/span><\/a><span style=\"font-weight: 400;\"> on Tuesday the 2025 budget proposal of about $509.7 billion (677.4 trillion won) and the 2024-2028 National Fiscal Management Plan. The plan aims to increase total government spending by 3.2% while reducing the fiscal deficit to 2.9% of gross domestic product, down from this year\u2019s deficit of 3.6%. Key initiatives include expanding welfare support for disadvantaged groups, increasing investments in high-tech industries and enhancing disaster preparedness and essential medical services.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The budget proposal, which will be submitted to the National Assembly on Sept. 2, focuses on four priorities: improving welfare for the financially vulnerable, boosting economic vitality, preparing for future challenges through structural reforms, and strengthening national security and global diplomatic standing. The government also aims to manage the national debt ratio at around 50% of GDP by 2028.<\/span><\/p>\n<p><b>WHY IT MATTERS<\/b><\/p>\n<p><span style=\"font-weight: 400;\">South Korea\u2019s 2025 budget proposal increases research and development (R&amp;D) spending by 11.8% to $22.3 billion (29.7 trillion won), focusing on high-tech sectors like AI, biotechnology and quantum computing. This move follows <\/span><a href=\"https:\/\/koreapro.org\/2023\/12\/south-korean-political-parties-strike-deal-on-2024-budget-amid-election-pressure\/\"><span style=\"font-weight: 400;\">criticism over last year\u2019s cuts<\/span><\/a><span style=\"font-weight: 400;\"> to the R&amp;D budget. However, even though the government stated that its budget proposal aims to improve welfare for the financially vulnerable, the budget cuts spending by $1.5 billion (2.067 trillion won) in disaster management and $2.4 billion (3.2 trillion won) in public housing. It also reduces funding for regional development and local community support programs.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The government has reduced non-core spending by $18 billion (24 trillion won) and stated that it expects revenue growth from improved corporate performance and economic recovery, projecting a 4.9% annual increase in tax revenues from 2024 to 2028. However, the Bank of Korea <\/span><a href=\"https:\/\/koreapro.org\/2024\/08\/south-koreas-central-bank-holds-rates-steady-for-13th-consecutive-time\/\"><span style=\"font-weight: 400;\">lowered its 2024 growth forecast<\/span><\/a><span style=\"font-weight: 400;\"> to 2.4% from 2.5% last week, reflecting weaker domestic demand despite robust exports.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The main opposition Democratic Party (DP) <\/span><a href=\"https:\/\/theminjoo.kr\/main\/sub\/news\/view.php?brd=188&amp;post=1205202\"><span style=\"font-weight: 400;\">criticized<\/span><\/a><span style=\"font-weight: 400;\"> the government\u2019s budget proposal, stating that the government set its forecast tax revenue for 2025 at $489.7 billion (651.8 trillion won) by including provisions for the abolition of the financial investment tax and reductions in inheritance tax rates. The DP has not agreed to such tax cuts. With the opposition controlling the legislature, the 2025 budget will likely face a contentious debate in the National Assembly.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><a href=\"https:\/\/koreapro.org\/tag\/domestic-politics\/\"><span class=\"tag\">Domestic Politics<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>South Korea\u2019s Cabinet approved on Tuesday the 2025 budget proposal of about $509.7 billion (677.4 trillion won) and the 2024-2028 National Fiscal Management Plan. The plan aims to increase total government spending by 3.2% while reducing the fiscal deficit to 2.9% of gross domestic product, down from this year\u2019s deficit of 3.6%. Key initiatives include [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2206285,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24,27],"class_list":["post-2206284","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy","tag-domestic-politics"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>South Korea\u2019s 2025 budget proposal faces political and economic challenges - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2024\/08\/south-koreas-2025-budget-proposal-faces-political-and-economic-challenges\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korea\u2019s 2025 budget proposal faces political and economic challenges - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"South Korea\u2019s Cabinet approved on Tuesday the 2025 budget proposal of about $509.7 billion (677.4 trillion won) and the 2024-2028 National Fiscal Management Plan. 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