Finance Minister Yoo Il-ho said the South Korean government would front-load government spending in the first quarter of this year to pump-prime a wobbly economy.
Yoo told a cabinet meeting "the government is aggressively pushing early spending to respond to fears of a consumption slump in the first quarter, jitters out of China and low global oil prices.”
Yoo’s comments came as the Bank of Korea (BoK) reported Tuesday the county’s economic growth slowed by more than half in the fourth quarter from the third quarter of 2015.
Fourth-quarter GDP rose 0.6 percent in seasonally adjusted terms from the third quarter, slowing from a 1.3 percent rise in the September quarter of last year.
BoK data showed construction investment dropped 6.1 percent in October-December from the previous quarter in the biggest decline in a year. But private consumption rose by a seasonally adjusted 1.5 percent in the fourth quarter, following 1.2 percent growth in the previous quarter to post the best quarterly rise since the December quarter of 2009. This is surge was due largely due to the government drive to hold nationwide discount sales in late 2015.
For the full year, South Korea's GDP rose 2.6 percent, compared to a rise of 3.3 percent in 2014, posting its slowest gain since 2012. ure.
The country's spending budget for this year stands at 386.4 trillion won ($330.12 billion), up 2.9 percent from last year, aimed at shoring up a stuttering economy
South Korea usually frontloads its annual budget to maximize the economic effects of the government's spending.
In December, the finance ministry said the government would frontload 58 percent of this year’s budgeted spending in the first half of the year, similar to last year’s spending plans.
The ministry aims for 29.2 percent of the annual spending budget to be utilized in the first quarter of next year to prevent consumption from lagging.
By Alex Lee
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