Korean spending will slow significantly

Korea's spending growth is planned to slow rather significantly from 8.1% in 2015 to 0.5% in 2016. On the breakdown of fiscal spending, we focus on the contraction of the infrastructure budget in 2016 after a jump in the 2015 supplementary budget. 

The spending on infrastructure rose from KRW23.7tn in 2014 to KRW26.1tn in 2015, but fell to KRW23.3tn in the 2016 budget. The growth rate of infrastructure spending will fall from 10.1% in 2015 to -10.7% in 2016. 

"The spending on welfare, which has the lion's share of overall spending (31.8%), is planned to increase by 2.1% in 2016 (still higher than the overall spending growth of 0.5%) after an impressive pick-up of 13.2% in 2015. The growth of the defence budget will be relatively strong at 3.7% in 2016 after 5.3% in 2015", notes Societe Generale.