The government announced major adjustments to state expenditures next year, with a focus on boosting post-pandemic recovery and strengthening fiscal soundness in response to the mounting national debt.

The guidelines for the 2023 budget, approved by the Cabinet on Tuesday, will aim to restore COVID-19 spending to pre-pandemic levels. The budget also calls for a reduction in discretionary spending by over ten trillion won to free up funding for the incoming administration’s policy goals.

The government will draw up the budget in accordance with a fiscal rule that is still pending parliamentary approval. The proposed rule limits the country's annual debt to 60 percent of the gross domestic product(GDP) and its fiscal deficit to three percent starting 2025.

This comes as the debt-to-GDP ratio is forecast to reach a record high of 50-point-one percent this year and the fiscal deficit close to 70-point-eight trillion won, or three-point-three percent of the GDP.

Ministries and agencies will submit their 2023 budget requests under these guidelines to the finance ministry by late May, but the details could be revised under the new administration.