Oh Se-hoon Criticizes Government's 93 Trillion Won Expansionary Budget, Asks If It Gave Up on Real Estate Market

▲ Seoul Mayor Oh Se-hoon

Seoul Mayor Oh Se-hoon criticized the government's record-large budget plan for next year, stating it would pour fuel onto the real estate market, and urged the National Assembly to conduct a strict review.

In a Facebook post today (September 4) titled "An expansionary fiscal policy of unprecedented scale, have you given up on the real estate market?", Mayor Oh criticized the government's budget proposal for next year as an "ultra-expansionary budget" that increased by a staggering 93 trillion won compared to this year.

He continued, saying, "(The government) significantly increased spending based on the optimistic expectation that national tax revenues will surge due to the semiconductor boom," and pointed out that "yet, national debt is projected to increase by 106 trillion won in just one year, surpassing 1,500 trillion won."

He also raised questions, asking, "Instead of paying off debt with the increased tax revenue to ease the burden on future generations, the plan is to increase debt further and pump money into the market. Is this really the right choice for our economic situation right now?"

Mayor Oh noted, "Since last year, I have warned that reckless expansionary fiscal policies amid high inflation and high interest rates could backfire by restimulating inflation and shaking the real estate market."

Furthermore, he explained, "If you closely examine real economic indicators, the liquidity ratio in the market (M1/M2) and housing price movements clearly tend to move in tandem."

He pointed out, "Meanwhile, the government has tightened taxes, loans, and transactions under the pretext of stabilizing real estate prices. How are we to understand this contradiction where one hand tightens the money supply while the other pours money out?"

Mayor Oh predicted, "Money does not have a tag on it. The money the government pumps out through an expansionary fiscal policy is bound not to stay only where the government wants it to. An increase in liquidity will inevitably impact inflation and the asset market accordingly."

He emphasized, "Especially in Seoul, where it is difficult to provide sufficient housing supply to meet demand in a short period, expectations for price increases are growing. It is as if the government is pouring the fuel of liquidity back onto the embers of the real estate market."

Regarding the government's budget formulation, Mayor Oh stated, "I cannot help but suspect whether this is an attempt to appease public sentiment by propping up the economy through fiscal spending now that real estate policies are showing signs of failure."

He also expressed concern, saying, "As prices rise, housing costs burden increases, and high interest rates prolong, household burdens for ordinary citizens, including the homeless and self-employed, will inevitably grow further. The money released under the guise of reviving people's livelihoods will end up choking ordinary people's lives."

Mayor Oh added, "The National Assembly must review next year's budget bill more strictly than ever. It must boldly weed out pork-barrel and consumerist money-sprinkling budgets, and adjust unnecessary spending to manage national debt. That is the way to prevent the worst-case scenario in the real estate market."

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