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Gov't eyes 'aggressive' expansionary fiscal policy next year

Politics 11:05 August 27, 2019

SEOUL, Aug. 27 (Yonhap) -- A top presidential official said Tuesday the government will seek to tackle downside economic risks and cope with Japan's export curbs against South Korea with an "aggressive" expansionary fiscal policy for next year.

The government plans to submit the draft budget worth 513 trillion won (US$422.8 billion) for next year to the National Assembly soon, up 9 percent from this year, in an effort to prop up the slowing economy.

Kim Sang-jo, Cheong Wa Dae chief of staff for policy, said the government's budget proposal is aimed at helping the local parts and material industries withstand Japan's trade restriction measures and tackling growing economic uncertainty at home and abroad.

"The government has made efforts to draw up next year's budget in a way that ensures aggressive expansionary fiscal spending," Kim said at the start of a meeting in Seoul among senior officials from Cheong Wa Dae and the government and the ruling Democratic Party (DP).

Prime Minister Lee Nak-yon (2nd from L) and senior officials from the presidential office Cheong Wa Dae, the government and the ruling Democratic Party, speak at the prime minister's residence in Seoul on Aug. 27, 2019, ahead of the trilateral meeting to discuss next year's budget proposal and other issues. (Yonhap)

Participants at the meeting also agreed to closely cooperate for the passage of major legislation on people's livelihoods and next year's budget bill during a regular parliamentary session that will start in September.

"They shared the understanding that the National Assembly should make legislative efforts to cope with Japan's export curbs, revive the economic momentum and prioritize the improvement of people's livelihoods," Rep. Hong Ink-pyo, chief spokesman of the DP, told a press briefing after the meeting.

Key bills that the government and the ruling party hope to pass during the regular session include a bill to support the parts and material industries and a proposal to set up a special unit to probe allegations of corruption by ranking government officials.

Meanwhile, Prime Minister Lee Nak-yon said the government could reconsider a military intelligence-sharing pact with Japan if Tokyo withdraws its export curbs against South Korea.

South Korea decided Thursday not to extend the General Security of Military Information Agreement (GSOMIA), citing a "grave change" in security cooperation conditions and Tokyo's refusal to accept Seoul's dialogue proposals. The deal, signed in 2016, is set to expire on Nov. 23.

"There remain about three months to go before the expiration of GSOMIA," Lee said.

"During that period, (if) Japan withdraws unjust (trade) measures, the government could reconsider the military pact. I hope both nations could come to dialogue with sincerity," he added.


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