Seoul announced plans to frontload next year’s budget of 469 trillion won (US$416.6 billion) as Asia’s fourth-largest economy faces sluggish growth and the government faces intense pressure to create more jobs.
The National Assembly approved the budget last week and the Cabinet on Tuesday endorsed a plan to frontload 281.4 trillion won, more than 70% of the budget, in the first half of 2019.
“The government will do its best to prevent the economic downturn and stabilize people’s livelihoods by frontloading 70% of the budget,” said Prime Minister Lee Nak-yon, according to Yonhap news wire. “We will focus on boosting the number of jobs.”
While President Moon Jae-in’s most notable achievements since taking office in the spring of 2017 have come in international diplomacy surrounding North Korea, domestically, he is facing rising pressure to increase the number and quality of jobs for graduates.
His economic policy has been centered on “income-led growth,” but his raises in the minimum wage have incensed small businesses, which have responded by firing or freezing hires. Last month, Moon gave his finance minister and his secretary on social affairs the boot.
In June, the government cut its annual job creation target to 180,000 from 320,000. GDP growth figures also look depressing. The Bank of Korea has cut its growth forecast for the year from 2.9% to 2.7%; the IMF anticipates 2.8%. The BOK also adjusted its growth estimate for 2019 down, from 2.8% to 2.7%.