South Korea approves welfare-focused budget

SEOUL: South Korea's Parliament yesterday approved a revised government budget for 2013 that focuses more on welfare in response to the next president's pledge to increase social spending.
The legislature ratified total spending of 342 trillion won ($ 319.46 billion), down from the government's proposal of 342.5 trillion.
It marked the first time in South Korea's history that a budget bill has been approved after the beginning of the fiscal year, which is the same as the calendar year.
The revised budget calls for cutting defense expenditure while spending more on social welfare and public construction projects.
Incoming President Park Geun-Hye, who takes office next month, has promised to expand free child care, subsidize college tuition fees and increase support for the poor.
Welfare spending this year will reach about 100 trillion won, higher than the government's proposal of 97 trillion won.
Rival parties had pushed for a bolder fiscal policy to stimulate the economy but reached a deal with the government to save any such measures for the future.
The Finance Ministry has delayed its plan to achieve a balanced budget by a year until 2014. The country's overall sovereign debt was estimated at 34 percent of gross domestic product in 2012.
Meanwhile, South Korea's trade surplus in 2012 shrank 7.1 percent to $ 28.6 billion in 2012, data showed yesterday, as exports were hit by shrinking demand in the key European market.
Overseas shipments fell 1.3 percent to $ 548.2 billion last year, while imports slipped 0.9 percent to $ 519.5 billion, the Ministry of Knowledge Economy said.
The 2012 trade surplus figure is down from $ 30.8 billion in 2011 and well off the $ 41.2 billion in 2010, it said.
In December alone, exports fell 5.5 percent from a year ago to $ 45.1 billion and imports retreated 5.3 percent to $ 43.07 billion.
Shipments to Europe in 2012 plunged 12.5 percent year-on-year to $ 47.6 billion, while exports to top destination China, which suffered a slowdown in growth during the year, fell 0.1 percent to $ 130 billion.
The numbers come a day after official figures showed inflation slowed to a four-month low of 1.4 percent in December, giving the central bank leeway to loosen monetary policy to boost economic growth.
Bank of Korea policymakers left the key interest rate unchanged at 2.75 percent in a meeting last month, after trimming it twice throughout the year.
South Korea's economy expanded at its slowest pace in three years in the three months to September, hit by falling demand overseas, with Europe gripped by a debilitating debt crisis. The government has warned that 2013 will likely be equally tough.