President Yoon Suk Yeol pledged on Tuesday to uphold fiscal soundness in the 2025 budget proposal while prioritizing the welfare of vulnerable groups and fostering economic growth.
Yoon presided over a Cabinet meeting to approve the government’s budget proposal of 677.4 trillion won ($509.5 billion) for 2025, a 3.2 percent hike from this year.
“The proposal cut 24 trillion won in government spending by reevaluating the feasibility and effectiveness of all fiscal projects,” Yoon said. “The savings will be allocated to essential national tasks.”
Yoon said that the national debt had surged by over 500 trillion won during the previous Moon Jae-in administration’s 2017-2022 term to 1,076 trillion won, creating significant fiscal challenges for his government.
“Given the challenges ahead, particularly with the rising costs of health insurance and pensions due to an aging population, we must tighten our belts, boldly reduce inefficiencies and ensure 토토 that budget is spent effectively on necessary areas,” Yoon said. “Sound fiscal management is the fundamental principle our government has adhered to in the budgets in the last three years.”
The government has adopted a fiscally conservative approach in response to declining tax revenues and economic uncertainties after years of expansionary budgeting during the COVID-19 pandemic.
Yoon said the government will effectively allocate its budget to actively address the demographic challenges amid a low birth rate and the aging population.
“To reverse the declining birth rate, we will completely shift our financial support approach,” Yoon said. “Instead of simply providing cash handouts, we will focus on the three key areas that are most needed in parenting: work-life balance, child-rearing and housing.”
To foster new growth drivers, the budget calls for increased investment in research and development for cutting-edge technologies, including artificial intelligence, biotechnology, and quantum technologies, as well as financial support for semiconductor clusters.
It also includes provisions to support mid- and small-sized businesses and boost health care funding to improve essential medical services and reduce regional disparities.
The Ministry of Economy and Finance plans to submit the budget proposal to the National Assembly early next month for approval