(LEAD) president-fiscal policy
(LEAD) Lee urges proactive fiscal policy to boost people's livelihoods
(ATTN: UPDATES with more info in last 2 paras)
SEOUL, May 12 (Yonhap) -- President Lee Jae Myung on Tuesday instructed officials to pursue a proactive fiscal policy in the second half of the year and beyond to help improve people's livelihoods.
Lee delivered the instruction at a Cabinet meeting, insisting that now is the time to nurture the nation's potential through investment and that greater investment will yield bigger returns.
"(The government) should focus on paving the way for a great leap forward in the national economy through fiscal (policy)," the president said, adding that the economic growth plan for the second half and the drafting of next year's budget should be based on such a principle.
Citing research results, Lee said that "proactive fiscal management" helps improve people's livelihoods, while bold fiscal spending helps revitalize the broader economy.
The president said that South Korea's national debt structure remains more sound than that of "any other country," adding that its "real debt ratio," which reflects the government's actual indebtedness, stands at around 10 percent of the gross domestic product.
"I don't mean to encourage lavish spending all the time. Borrowing should not be pursued frequently," Lee said. "(But) it is the government's role to help circulate the economy through investment."
President Lee Jae Myung speaks at a Cabinet meeting at Cheong Wa Dae in central Seoul on May 12, 2026. (Yonhap)
The president also called for the elimination of "low-efficiency projects" as much as possible in drafting next year's budget, stressing the importance of maximizing efficiency in government spending.
During Tuesday's meeting, Budget Minister Park Hong-keun also called for "intensive restructuring" of government spending to ensure that the Lee administration's policy projects are efficiently reflected in budget spending.
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