Monetary, fiscal policies out of sync as BOK hikes rates, gov't boosts spending
Concerns are growing that the country's monetary and fiscal policies are moving out of sync, as the central bank accelerates its tightening cycle while the government pursues an expansionary fiscal policy with next year's budget proposal expected to exceed 800 trillion won ($581 billion), experts said Friday. The Bank of Korea (BOK) on Thursday raised its benchmark interest rate by 0.25…
The Bank of Korea (BOK) has raised its benchmark interest rate by 0.25 percentage points to 3%, aiming to curb inflationary pressures. This move marks the second consecutive hike in interest rates by the central bank. Meanwhile, the government is preparing its next year's budget proposal, which is expected to exceed 800 trillion won ($581 billion), representing a 10% or more increase from this year's budget of 729.9 trillion won.
This proposal marks the first double-digit increase in total expenditures since 2009, during the global financial crisis. Experts have expressed concerns that the BOK's tightening monetary policy and the government's expansionary fiscal policy may clash, potentially weakening the country's economic stability.
Brief written by urgent.news from The Korea Times's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
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