Finance Minister Choo Kyung-ho holds a briefing on the 2023 budget proposal at the government complex in Sejong, central South Korea, on Aug. 30, 2022. (Yonhap)
South Korea's finance ministry said Tuesday it will push to introduce fiscal rules that would mandate a sharp drop in the deficit in case the national debt exceeds 60 percent of gross domestic product (GDP).
The move came in line with the Yoon Suk-yeol government's push to implement a belt-tightening policy as part of effort to improve the country's financial soundness following years of expansionary fiscal spending.
During the emergency economic ministers' meeting, the government decided to push for the introduction the fiscal rules, which call for capping the fiscal deficit to 3 percent of GDP, according to the finance ministry.
If the debt-to-GDP ratio exceeds 60 percent, the government shall lower the deficit to 2 percent or less, it added.
This year's debt-to-GDP ratio is likely to hit 49.7 percent.
"The introduction of the regulation that controls and manages the total amount of the budget is necessary to ensure the financial soundness," Finance Minister Choo Kyung-ho said during the meeting. "We will work closely with the National Assembly for its swift enactment."
The country saw the national debt grow more than 400 trillion won ($291.04 billion), or some 62 percent, over the past five years, according to the ministry. (Yonhap)
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