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Budget formulation and implementation in Korea : A macroeconomic perspective

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Frame of Image DP as a result of near balanced budget outcomes in the preceding decade. The fiscal accounts, however, have not been very
1. Korea has an admirable tradition of to incurring fiscal deficits and public debt. On the eve of
transparent: the budget structure is unnecessarily complicated and fragmented; and weakesses in budget formulation and implementation make the budget a poor indicator of
the overall fiscal stance and reduce its efficiency as a tool of macroeconomic policy.
2. In recent years the government has introduced a medium-term plan for fiscal
consolidation and initiated refonn measures to improve fiscal transparency. A special law on fiscal soundness was submitted to the National Assembly in 2001 that aims to achieve a
balanced budget and ensure prudent debt management. There is a polítical consensus in
Korea on the need to reduce public debt, which, although low by OECD standards, is at historically high levels as a result of the financial crisis in the late 1990s. There are also plans to revise the Budget and Account Law to adopt performance-based budget preparation and implementation and to ensure better provision of information on fiscal operations to the public. These reform measures notwithstanding, more consideration needs to be given to the role of fiscal policy in macroeconomic management. In particular, there is a need to formulate fiscal policy in a medium-term framework so that the fiscal stance is appropriate to developments in the business cycle.
3. Fisc


Full Text
Title Budget formulation and implementation in Korea
Similar Titles
Sub Title

A macroeconomic perspective

Material Type Reports
Author(English)

He, Dong

Publisher

International Monetary Fund

Date 2003-03
Pages 15
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Macroeconomics
Economy < Financial Policy

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