Analysis of the 2018 First Supplementary Budget Plan
Published on 15 May 2018
Published by Budget Analysis Coordination Division of the Budget Analysis Department
On April 6th, the government submitted to the National Assembly its 2018 First Supplementary Budget Plan, a 3.9 trillion won scheme to create youth jobs and pursue support measures for regions and industry sectors experiencing restructuring. Although the Korean economy in 2018 has been showing signs of improvement led by exports and investments in plants and equipment boosted by the global economic recovery, the youth unemployment rate remains high at 9.8% in 2017, similar to the previous year. The Korean economy is faced with a difficult situation as production and employment in regional economies are shrinking due to the restructuring of the auto and shipbuilding industries.
The size of this supplementary budget plan is 3.9 trillion won, consisting of a 2.0 trillion won tax surplus, 0.6 trillion won Bank of Korea surplus and 1.3 trillion won in surplus funds from the state-run funds. The government plans to utilize these funds to spend 2.9 trillion won on creating youth jobs and 1.0 trillion won on providing support for regions and industry sectors undergoing restructuring.
In this report, Chapter 1 provides an overall analysis on the conditions for allocating the supplementary budget, the source of the supplementary budget and fiscal soundness, an analysis of the program to create youth jobs as well as an analysis of the regions and industry sectors experiencing restructuring. Chapter 2 provides an analysis of the economic effect of the supplementary budget and the effect of tax credits and benefits provided for the youth employment measures. Finally, Chapter 3 provides an in-depth analysis of individual programs pursued by each of the standing committees.