South Korea will set aside 22.6 trillion won (US$19.8 billion) for social infrastructure projects next year in order to help bolster regional economies, the finance ministry said Wednesday.
The spending plan is part of the government's 2012 budget proposal that will soon be finalized and submitted to parliament for approval, according to the Ministry of Strategy and Finance.
The social overhead capital budget is lower than 24.4 trillion won assigned for this year but when the spending on the near-completed project to refurbish the nation's four major rivers and preparation for the 2012 Yeosu Expo is excluded, the amount increased 1.2 trillion won, the ministry said.
The government will use part of the money to strengthen the nation's overall infrastructure. Also, part of the budget will be spent to help small and medium-sized companies and expand investment in new growth engines as well as the green and service sectors, according to the ministry.
The government, meanwhile, will seek an annual budget for next year ranging from 324 trillion to 327 trillion won, up 4.8-5.8 percent from this year's budget, the ministry said.
The envisioned increase is smaller than a 7.6 percent budget hike requested by each government ministry and agency back in June.
The plan seems to be in line with a mid-term fiscal management plan unveiled earlier this month that is designed to help the government achieve a balanced budget by 2013, one year earlier than its previous target deadline.
Under the plan, the ministry said that it will limit its annual expenditure growth to 4-5 percent and maintain a 7 percent growth in fiscal income from 2011 to 2015.
"Our budget proposal focused not just on job creation and welfare but also on the fiscal side to prepare for the future and economic vitality," said Kim Dong-yeon, a senior ministry official in charge of budget affairs.