On Friday, South Korea’s parliament greenlit a supplementary budget of 31.8 trillion won (approximately $23.3 billion) aimed at supporting President Lee Jae Myung’s efforts to strengthen an economy facing trade challenges and sluggish consumer spending.
The approved budget exceeds the government’s initial proposal of 30.5 trillion won. The Finance Ministry announced that a cabinet meeting will be held on Saturday to finalize the revised budget.
President Lee took office amid an economy struggling with declining demand, following months of national unrest sparked by former leader Yoon Suk Yeol’s failed martial law initiative in December.
In the first quarter, the economy unexpectedly shrank, influenced by U.S. President Donald Trump’s extensive tariffs, with projections indicating a mere 0.8% growth for the year, according to the Bank of Korea.
As a result of this budget, South Korea’s government debt is expected to rise to 49.1% of gross domestic product, up from 48.4%, while the fiscal deficit will increase to 4.2% from 3.3%. Notably, 21.1 trillion won of the total will be financed through the issuance of additional bonds.
