Presidential Office responds to criticism of austerity measures: ”Increasing government spending in the current situation will only increase the national debt” (South Korea)

On the 28th, the President's Office said, "Increasing government spending in a situation where the fiscal multiplier has fallen will not have a significant impact on economic growth. Rather, it is likely that the issuance of deficit bonds will only lead to an increase in the national debt."
A presidential office official made the remarks in response to criticism that the 2025 budget proposal had undergone severe budget cuts despite sluggish domestic demand.
The fiscal multiplier, a measure of how much government spending affects gross domestic product (GDP), is currently much lower than in the past.
He added, "Rather than expanding the budget for the sake of economic growth, the government is focusing on regulatory innovation to allow the private sector to fully demonstrate its creativity and capabilities."
Earlier, the government passed the 2025 budget proposal. The total expenditure for next year's government budget was set at 677 trillion won (approximately 73.225 trillion yen).
This is a 3.2% increase from the previous figure, but it is lower than the current growth rate (4.5%) predicted by the government for next year and is being evaluated as an austerity measure.
This is also the lowest growth rate in the first three years of the current term. The source said, "The Yoon Seok-yeol administration has been establishing a free market economy with the private sector leading the way and the government providing support.
"As the economy continues to grow, the weight of the private sector has become much larger than that of the government sector," he said.
"We are promoting consumption through policies such as the August 8 housing supply expansion program and stimulating investment through measures such as the August 8 housing supply expansion program," he added.