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S. Korea not to adopt extra budget in 2014: finance minister

English.news.cn   2014-07-16 10:18:08

SEOUL, July 16 (Xinhua) -- South Korea's top economic policymaker said Wednesday that the government will not adopt a supplementary budget in 2014 though this year's growth outlook will be revised down.

"It will be inevitable to downgrade this year's economic growth outlook, but an extra budget will not be drawn up," Choi Kyung- hwan, deputy prime minister and finance minister, said in his inaugural speech.

Choi vowed to use various measures of fiscal support to enhance the economy, saying the 2015 budget plan will be more " expansionary" than initially planned.

His comments came amid growing worries about economic slowdown caused by weaker private consumption after the deadly ferry disaster.

The ferry Sewol capsized and sank off the southwestern coast on April 16, leaving more than 300 people, mostly high school students, dead or missing. The accident has led consumers to refrain from entertainment and travel.

Bank of Korea lowered its 2014 growth outlook for the economy to 3.8 percent last week from the 4 percent forecast three months earlier.

Choi said local companies tended to have cash holdings as internal reserves "too much conservatively," promising to consider institutional measures to let companies pay those cash as dividends or bonuses that will be used by consumers.

Choi said the loan-to-value (LTV) and the debt-to-income (DTI) ratios will be "adjusted rationally" after consulting with related ministries.

The LTV and DTI ratios are viewed as regulations to suppress massive household debts, but those were expected to be eased to boost the sluggish housing market.

Editor: Fu Peng
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