The Construction Association of Korea recommended that the government expand the budget for social overhead capital (SOC) to 30 trillion won next year. The association noted on the 22nd that it proposed the establishment of a 3 trillion won second extra budget for SOC this year to the Ministry of Land, Infrastructure and Transport and the Ministry of Economy and Finance, along with a budget allocation of over 30 trillion won for next year.
The association cited a research report from the Korea Construction Industry Institute, predicting that the economy's growth rate would reach 2.1%, higher than the initial forecast of 1.5% by the Bank of Korea, due to the first extra budget finalized on the 1st. It also forecast that through the second extra budget, the economic growth rate could rise to 2.5% next year.
Accordingly, the association viewed the necessary second extra budget for SOC this year as 3 trillion won and noted that at least 30 trillion won for the SOC budget would be required next year.
The association argued, "Recently, our economy has recorded a GDP growth rate of below 0.1% for four consecutive quarters, a situation more serious than the financial crisis (two consecutive quarters) and the International Monetary Fund (three consecutive quarters)," adding, "As investment contraction leads to decreased consumption, we have entered a vicious cycle, making it a critical time to expand SOC investment to transition to a virtuous cycle."
Chairman Han Seung-gu emphasized, "To overcome the imminent low-growth crisis and improve the quality of life for the people, it is essential to expand SOC investment, which is the most effective means for economic growth and job creation."
The budget of the Ministry of Land, Infrastructure and Transport this year was set at a total of 58.2 trillion won, including 25.4 trillion won for SOC. It later increased to 59.3 trillion won through an extra budget of 1.1352 trillion won.