Government to inject additional 7 trillion won to foster investment from public institutions, announces finance minister

South Korean Government Announces Holiday Support Plan and Fiscal Agency Restructuring

In a significant move, the South Korean government has announced a comprehensive holiday support plan and a major restructuring of its fiscal agency. The announcements were made by Finance Minister Koo Yun-cheol during his first official press briefing since taking office.

The holiday support plan, designed to ensure price stability and protect vulnerable groups, comes amid concerns about inflation, particularly for essential living costs like food prices. Minister Koo emphasized the need to control inflation before the extended Chuseok holiday.

As part of the plan, the government will inject an additional 7 trillion won ($5.03 billion) by the end of the year to stimulate investment from public institutions. This injection is part of efforts to revitalize the economy amid a prolonged slowdown.

The government's restructuring plan involves the establishment of a new fiscal agency under the prime minister's office. This agency will take over the budget planning authority from the Ministry of Economy and Finance. The details of who will take over the planning of the government's budget administration in the future are not yet specified.

The new fiscal agency, like the Ministry of Finance, will prioritize three areas: responding to economic cycles, revitalizing livelihoods, and stabilizing consumer prices. According to Minister Koo, these priorities align with the goals of the holiday support plan.

It's worth noting that consumer prices rose 1.7 percent on-year in August, the slowest increase in nine months. Had it not been for a sharp drop in mobile phone fees, the inflation rate would have reached 2.3 percent, marking the fastest price growth since July 2024.

However, the moderation in consumer price growth may be temporary, according to Statistics Korea. Minister Koo's remarks underscore the government's commitment to maintaining price stability and supporting vulnerable groups during this period of economic uncertainty.

Government to inject additional 7 trillion won to foster investment from public institutions, announces finance minister