President Moon Jae-in said that an expansionary budget is essential for next year as active fiscal policy is more necessary than ever.

Moon on Tuesday said in his speech for next year's budget at the National Assembly that the South Korean economy, which is highly dependent on trade, faces a critical situation as the global economy rapidly deteriorates due to the U.S-China trade conflict and expanding protectionism. 

He said that government finance should work as both a breakwater against external shocks as well as priming water to pump up the economy. He stressed that the costs will grow unless properly coped with now. 

Regarding concerns over fiscal soundness, Moon said the country's finances and economy have grown enough to provide a quality life for people and that South Korea's fiscal health is in good shape. 

He added that the ratio of government debt to gross domestic product(GDP) will be below 40 percent next year, much lower than the average 110 percent of Organization for Economic Cooperation and Development member states.

The president said that the country should head towards an innovative, inclusive, fair and peaceful economy where all live in prosperity, adding that the budget for next year was designed in this regard.