Park Hongkeun: "Potential Growth Rate to Hit 0% by 2040... Next Year's Budget Will Unlock Korea's Growth Potential"

Appearing on Democratic Party TV on the 3rd to Explain Next Year's Budget

On National Debt Concerns: "Managed Fiscal Balance Ratio at -0.1%"

"Aiming to Achieve Both Economic Growth and Fiscal Soundness"

Park Hongkeun, Minister of Planning and Budget, emphasized on September 3, "South Korea will face serious consequences if we continue down this path," adding, "Next year's budget is a bold investment to open up the growth potential for the future of Korea."

Appearing on "Mintee 07" via the official YouTube channel of the Democratic Party, "Democratic Party TV," Minister Park stated, "If things remain as they are, Korea's potential growth rate will drop to 0% in the 2040s." He described the surge in tax revenue from the semiconductor supercycle as a "golden opportunity," and asserted, "We will make bold investments to raise the potential growth rate again."

Hongkeun Park, Minister of Planning and Budget, is reporting on the 2027 budget plan and the 2026-2030 national fiscal management plan at the Cabinet meeting presided over by President Jae-myung Lee at the Blue House on the 1st. Photo by Yonhap News

The Ministry of Planning and Budget has set next year's proposed budget at 820.9 trillion won, a "super budget" representing a 12.8% increase from this year. If total expenditures increase by an annual average of 8.4% during the term of President Jae-myung Lee, the national budget is projected to exceed 1,000 trillion won for the first time by 2030.

Amid growing concerns over increased national debt due to this large-scale expansionary fiscal policy, Minister Park maintained that fiscal indicators would actually improve even with this record-high spending. He said, "Next year, the managed fiscal balance relative to GDP will be minus 0.1%. By reducing the volume of newly issued government bonds by 12.5 trillion won, the overall managed balance and national debt ratio will further decline." He added, "The national debt-to-GDP ratio will drop to 49% by 2030, the government's final year, which is more than 10 percentage points lower than previously planned."

He also reiterated the need to treat the fiscal approach of Yoon Suk-yeol's administration as a lesson in what not to do. "During Yoon's three years in office, there was a revenue shortfall of about 100 trillion won, leading to passive spending and tax cuts that ultimately caused an economic slowdown—a so-called vicious cycle of austerity," he criticized. He drew a clear line, saying, "Our administration is different" and asserted, "We will be the first government to achieve both economic growth and fiscal soundness at the same time."

This content was produced with the assistance of AI translation services.