Moody's has assessed South Korea's budget proposal for next year and its new future response fund as striking "a balance between fiscal soundness and securing growth momentum," the government said.
Maria Lee, head of external relations at Moody's, delivered the assessment to South Korean officials during recent meetings, the Ministry of Finance and Economy said on the 8th. The talks covered both the spending increases in next year's budget proposal and plans for fiscal management. Officials explained the government's plan to expand investment in future growth areas, including three mega-projects and artificial intelligence. They also stressed that while spending next year will be the largest on record, the managed fiscal balance will be at its healthiest level in about 20 years. On the newly created future response fund, officials said additional tax revenue would be channeled into strategic investment and used as a mechanism to reinforce fiscal capacity when needed.
Moody's also described this year's issuance of foreign exchange stabilization bonds as successful. The government sold $3 billion and 1.7 billion euros worth of the bonds this year. Spreads on the euro-denominated notes came in 0.15 percentage point lower for the three-year tranche and 0.24 percentage point lower for the seven-year tranche than last year, which had marked the previous low. That means the South Korean government raised funds in international financial markets at a lower cost.
