South Korea's parliament passes 2023 budget bill

South Korea's parliament approved President Yoon Suk-yeol administration's first full-year budget bill for 2023 on Saturday, which cut total spending and the fiscal deficit from this year.

The approved budget, valued at 638.7 trillion won ($498.89 billion) or 6% less than this year's, is set to cut the fiscal deficit to 0.6% of gross domestic product (GDP) from 3.3% this year.

Out of the total, a bulk of 35.4% was allocated for public health, welfare and employment programmes, followed by 15.1% for the education sector and 8.9% for national defence spending, according to the finance ministry.

Conservative Yoon has pledged since taking office this year to strengthen government finances, weakened in recent years by increased public spending to expand welfare programmes and fight the COVID-19 pandemic.

South Korea's government debt-to-GDP ratio has steadily risen to hit an estimated 49.7% this year from below 40% in 2019 and below 30% in 2010 as the country has expanded the welfare system as its population has been ageing.

The ratio is set to hold almost steady at 49.8% next year.

The new government aims to contain the debt growth by keeping the fiscal deficit at 0.5% to 0.6% in each of the next several years, compared with 3.3% estimated for this year.

During the session that started late on Thursday, the parliament approved a proposed plan to cut the corporate income tax by 1 percentage point for each tax bracket, including cutting the top rate to 24% from 25%.