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S Korea parliament approves record 607.7 trln won budget for 2022

S Korea parliament approves record 607.7 trln won budget for 2022

FILE PHOTO: An employee walks at an empty park near a financial district amid the coronavirus disease (COVID-19) pandemic in Seoul, South Korea, September 10, 2020. REUTERS/Kim Hong-Ji

SEOUL :South Korea's parliament on Friday approved increasing next year's budget by a net 3.3 trillion won to 607.7 trillion won (US$516.42 billion), to support a swifter economic recovery and help those hit by the coronavirus pandemic.

That would be an 8.9per cent increase from this year's budget that excludes two emergency supplementary budgets, the finance ministry said. South Korea's fiscal year starts on Jan. 1.

The budget increases spending by a total 8.9 trillion won from the initial proposal, including 2 trillion won of stimulus to help small businesses and 1.4 trillion won to secure COVID-19-related quarantine and medical infrastructure.

Offsetting some of the increase was a cut totalling 5.6 trillion won from the original budget after lawmakers adjusted priorities.

Friday's parliamentary approval comes about three months after the initial proposal of 604.4 trillion won in late August and is expected to bring the ratio of government debt to gross domestic product to a record 50.0per cent in 2022.

Asia's fourth-largest economy, heavily reliant on exports of computer chips, smartphones, cars and ships, looks on track for a 4per cent growth this year, according to central bank forecasts, rebounding solidly from a 0.9per cent contraction in 2020 - the worst performance in a decade.

The Bank of Korea raised the policy interest rate by half a percentage point in two steps since August to 1.00per cent, while markets have priced in another hike next year.

(US$1 = 1,176.7500 won)

(Reporting by Joori Roh; Editing by Jacqueline Wong & Shri Navaratnam)

Source: Reuters

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