DETAILS OF 2021 EXPANSIONARY BUDGET

[Anchor Lead]

The government has proposed a record 555.8 trillion won budget for next year. Now this is an expansionary budget aimed at reviving the economy hit by the pandemic. Let's take a look at where the massive budget will be used in detail, alongside concerns of mounting national debt.

[Pkg]

This is a hydrogen fueled car with zero carbon emissions. Some 116-thousand electric and hydrogen vehicles will be distributed next year, with an investment of 1.6 trillion won. The government has earmarked nearly 16 trillion won for the Green and Digital New Deal projects - the two main pillars of the so-called Korean New Deal initiative. Including budgets allotted toward expanding the social safety net for vulnerable citizens struggling from the COVID-19 economic fallout, the total budget related to New Deal projects surpass 21 trillion won. Another 8.6 trillion won has been set aside to create public sector jobs and increase funds for retaining employment. The government seeks to foster future growth sectors but also look after people who may be left behind in this process.

[Soundbite] HONG NAM-KI(FINANCE MINISTER) : "Next year will be a golden time in determining the direction of the Korean economy. I believe the 2021 budget will play a central role in this aspect."

Around 1.8 trillion won will go towards facilitating consumer coupons and gift vouchers to boost private sector spending. 19 trillion won will be spent in building public rental houses geared toward the middle class. With the ever increasing government spending, the fiscal balance, which indicates the level of soundness in state finances, is expected to record a deficit of 109.7 trillion won. The ratio of national debt to GDP will also near 47%. Even if the deficit level is managed as planned over the next 4 years, the debt ratio is expected to near 60% by 2024.

[Soundbite] PROF. KIM SO-YOUNG(SEOUL NAT'L UNIVERSITY) : "The debt ratio will be rising by nearly 20% in 5 years. Extra budgets appear likely next year also. So the actual ratio may well surpass 60% by 2024."

Expansionary use of the budget is inevitable due to the pandemic, as the government needs to revive the economy but also rein in unnecessary spending as much as possible.