President Moon Jae-in says the government needs to maintain its expansionary fiscal policy at least until next year to help support South Korea's economic recovery and narrow its income gap exacerbated by the pandemic. 

Moon made the remark while presiding over a rare national finance strategy conference at the presidential office on Thursday.  

He noted opinions are split on whether to put the priority on fiscal expansion or on fiscal sustainability, but said fiscal policy should serve as a balance weight and help reinvigorate households and businesses and help narrow income disparity.

Moon admitted South Korea's national debt is expanding faster than in the past due to increased government spending regarding COVID-19, however he said the increase is smaller compared to other countries and that the nation’s fiscal health is still sound. 

Noting that the nation's expansionary policy is enhancing fiscal stability by boosting tax revenues in step with its economic recovery, he said the government needs to further boost the effect of such a virtuous cycle. 

The president also said the nation is recovering at a quicker pace than many advanced countries on the back of its expansionary policy. Still, he cautioned the economy has yet to fully bounce back. South Korea's gross domestic product contracted by 1 percent last year.

He said the government should keep the option open to an additional fiscal injection using increased tax revenue in order to enhance the nation's capacity to deal with future changes in COVID-19 infection levels and the pace of its economy recovery, indicating the possibility of an additional supplementary budget.