Exceeding 800 Trillion Won and Eyeing 1 Quadrillion Won: Sharp Rise in Government Spending Sparks Debate

With next year's budget surpassing 820 trillion won to reach a record high, concerns are being raised over whether the government is being overly optimistic about economic forecasts and engaging in excessive spending.

The government announced that next year's budget will increase by nearly 13% compared to this year's main budget, surpassing the roughly 10% increase seen during the 2009 global financial crisis.

Furthermore, the government stated it will maintain an expansionary fiscal stance with an average annual increase of 8.4%, aiming to push total expenditures into the 1,000 trillion won range by 2030, when President Lee Jae-myung's term ends.

The estimated increase in government spending over the five-year term of the Lee Jae-myung administration stands at 331.9 trillion won. This is on par with the 347.9 trillion won increase recorded over the combined 13 years of the Park Geun-hye, Moon Jae-in, and Yoon Suk Yeol administrations.

The reason behind the government's fiscal plan lies in its positive economic outlook.

The government projects that even as national debt increases, the size of the economy will grow alongside it, allowing the national debt-to-GDP ratio to be maintained at around 48% from next year through 2030.

The total national debt is projected to surge by 107 trillion won in a single year, rising from 1,413 trillion won at the end of this year to 1,520 trillion won by the end of next year. However, the government anticipates that next year's national tax revenue could jump by nearly 50% driven by a semiconductor boom.

Park Chang-hwan, Director General for Budget Policy at the Ministry of Economy and Finance, stated, "While the OECD average for fiscal expenditure relative to GDP is 42%, South Korea's is around 35%. Rather than being startled by the 1,000 trillion won figure, I even think it may need to increase further."

However, experts are voicing concerns.

Yang Jun-sok, a professor at The Catholic University of Korea, said, "Steeply raising the total expenditure growth rate without any guarantee that tax revenue will continue to increase poses significant problems."

Kim Sang-bong, a professor at Hansung University, said, "At a time when it is uncertain when the semiconductor industry might face a downturn, sharply increasing total expenditures could balloon the fiscal deficit, which is worrisome."

Reported by Kim Jiuk | Video by Lee Dain | Graphics by Lee Jeong-ju | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.