Government prioritizes fiscal soundness as SK faces shrinking tax revenue and soaring debts

  • The Cabinet on Tuesday approved the 2024 budget proposal worth 656.9 trillion won ($497 billion), marking the lowest on-year growth in nearly two decades as the country suffers from sluggish tax revenue. The size of the proposed budget has increased by 2.8 percent from this year’s 638.7 trillion won, the smallest increase in a budget proposal since 2005.
  • President Yoon Suk Yeol said that due to the past administration’s loose fiscal management, Korea’s national debts increased by 400 trillion won, surpassing 1,000 trillion won for the first time last year.
  • By sector, the government cut 16.6 trillion won from the research and development budget, downsizing it to 25.9 trillion won. It also pulled down the education budget by 6.6 trillion won to 89.7 trillion won, considering the decreasing school-age population.
  • Despite the cuts, Korea’s national debt is expected to grow, increasing by 61.8 trillion won next year, the government projected.
  • While tightening its belt on state spending, Korea plans to expand support for the nation’s underprivileged. The budget also aims to tackle the country’s chronically low birthrate by extending parental leave while also lifting the limit for monthly payments.

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