The government and the ruling Democratic Party held a policy meeting on Monday and agreed to compile an expansionary budget next year to stimulate the sluggish economy.

Finance Minister Hong Nam-ki said in the meeting that the government has drafted an expansionary budget for next year, although a temporary fiscal deficit is likely.

Hong stressed the need to implement a "greater and aggressive" fiscal policy, citing increasing economic uncertainties at home and abroad. 
 
As for efforts to mitigate potential economic damage caused by recently-introduced Japanese export curbs, the ruling bloc decided to set aside more than two trillion won to help local parts and materials industries enhance their competitiveness.

The government and the party also agreed to increase an emergency fund for the industries of parts, materials and equipment.

In addition, they agreed to double next year's budget for projects aimed at improving air quality, with a goal to reduce fine dust by 30 percent by 2021, one year earlier than a previously announced timeline.

The government plans to submit the budget to the National Assembly next Tuesday after securing Cabinet approval this week.