S. Korea needs to enhance fiscal soundness: finance minister

SEOUL June 30 (Yonhap) -- South Korea's fiscal status remains "comparatively
better" than other advanced nations despite massive economic-bolstering measures,
but the government must keep working to improve its soundness to brace for
increased public spending, Seoul's top economic policymaker said Tuesday.
"Korea's fiscal soundness has certainly deteriorated in the process of overcoming
this (economic) crisis but still remains at a comparatively better level than
other advanced countries," Finance Minister Yoon Jeung-hyun told a forum here
attended by budget and fiscal experts from member nations of the Organization for
Economic Cooperation and Development.
"Nevertheless, focused efforts to manage fiscal soundness are necessary, taking
into account our aging population and expected increase in future demand for
public spending," he added.
His comments come as countries around the world have been rushing to increase
state spending aimed at buttressing their economies hit hard by a protracted
global recession.
South Korea also joined in efforts to expand fiscal spending and reduce taxes to
bolster demand and investment. Despite their intended effect of easing the pace
of the economic downturn, some experts worry that increasing state spending could
dent the nation's fiscal soundness by hiking debts and reducing the overall tax
revenue.
Reflecting such concerns, Yoon told participants that the Seoul government is
preparing a mid-term fiscal management plan which will focus mainly on reforming
its expenditure processes and expanding the tax revenue base down the road.
He also called for international cooperation and experience-sharing "not just in
overcoming the crisis but also in enhancing fiscal soundness."
kokobj@yna.co.kr
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