Moscow. June 5. INTERFAX.RU – the New President of South Korea, moon Jae In plans to increase public spending plans 11.2 trillion won ($10 billion) – these funds will be used to stimulate economic growth and create jobs, writes The Wall Street Journal. On Wednesday, the President’s plan will be considered in Parliament.
Moon Jae-In, who took the post of the President of South Korea in may 2017, during the election campaign promised to create 810 thousand jobs in the public sector for five years. His first decree as President was the creation of a Committee responsible for the creation of jobs.
According to the Ministry of Finance of South Korea, a supplementary budget in the amount of 11.2 trillion won will enable the government to create 12 thousand new jobs, including police officers, firefighters, soldiers and teachers. The allocated funds also will help preserve jobs in health care and other social spheres.
The deterioration in the employment situation in the country, especially among youth, requires additional government spending, noted in the South Korean Ministry of Finance. Youth unemployment in the country reaches 10%, twice the General unemployment rate.
High youth unemployment is a “structural problem,” says economist at DBS Bank in Singapore Tieing MA. The country has many highly educated young people looking for a decent job, however, the South Korean economy simply is not creating jobs that require highly qualified employees in sufficient numbers, he said. The Ministry of Finance hope that the creation of new jobs in the public sector will push growth weak consumer demand. The South Korean economy is increasing its exports, but domestic demand remains weak.
According to estimates of the Ministry of Finance, GDP in 2017 will increase by 2.6% after rising 2.8% in the previous year. Additional expenditure budget is expected to add 0.2 percentage points to annual GDP growth during current and next year.