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(3rd LD) Gov't to submit extra budget bill to parliament in late April

All News 16:03 April 03, 2019

(ATTN: UPDATES with assessment by S&P delegation)

SEOUL, April 3 (Yonhap) -- The government plans to submit an extra budget bill to parliament later this month to cope with fine dust and boost the slowing economy and job creation, the finance minister said Wednesday.

Hong Nam-ki said in a meeting with officials in Seoul that the government needs to respond aggressively, citing growing downside risks and difficulties facing people in finding jobs.

South Korea's exports declined 8.2 percent in March from a year earlier, marking the fourth straight month that outbound shipments have fallen since December.

(3rd LD) Gov't to submit extra budget bill to parliament in late April - 1

The finance minister told reporters after the meeting that the size of the extra budget could be less than 9 trillion won (US$7.9 billion) -- the amount that a team from the International Monetary Fund proposed to achieve South Korea's 2019 goal of 2.6-2.7 percent economic growth.

The country's top economic policymaker also made similar comments to global rating appraiser Standard & Poor's delegation led by Kim Eng Tan, senior director of Asia-Pacific sovereign ratings, on an extra budget during an annual consultation meeting in Seoul.

The S&P officials made a positive assessment of South Korea's solid fundamentals and its commitment to boosting the economy, which they say is key to South Korea's solid sovereign rating.

In 2018, S&P reaffirmed its long-term sovereign rating for South Korea at AA -- the third-highest grade in the company's evaluation scheme -- with its outlook remaining stable.

Still, the S&P delegation said geopolitical risks related to North Korea's nuclear and missile programs are a negative factor in upgrading South Korea's credit rating.

Last month, President Moon Jae-in called on officials to draw up an extra budget, if necessary, to counter fine dust air pollution, which can cause various health problems.

Hong said an extra budget, if approved, will be used in introducing equipment to monitor fine dust and providing assistance in reducing fine dust air pollution, such as scrapping old diesel cars.

South Korea has said it plans to take all diesel cars off the road by 2030 to help curb fine dust.

Fine dust has blanketed South Korea in recent weeks, prompting calls for actions to reduce the particles smaller than 10 micrometers in diameter. Fine dust can cause various respiratory diseases and undermine the body's immune system. Ultrafine dust particles are smaller than 2.5 micrometers in diameter.

The proposed extra budget is also meant to ease downside risks and boost the social safety net.

An extra budget is subject to parliamentary approval.

At least 151 out of 300 lawmakers need to be present at the parliament to put a bill to a vote. Of them, a majority of votes, at least 76, is needed to endorse the measure, according to the National Assembly.

The ruling Democratic Party has 128 seats in the 298-member parliament, with the main opposition Liberty Korea Party holding 113 and minor opposition parties and independents accounting for the other 58. By-elections are underway to elect two lawmakers in South Gyeongsang Province in the country's southeastern region.

Last year, South Korea's parliament approved an extra budget bill worth 3.83 trillion won to create jobs for young people and help industrial regions grappling with massive layoffs.

Hong Nam-ki, the minister of economy and finance, walks into a conference room at a government building in central Seoul on April 3, 2019. (Yonhap)


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