South Korea Unveils $8.6B Extra Budget to Support Economy
South Korea has unveiled a supplementary budget of KRW 12.2 trillion ($8.6 billion) aimed at countering the growing threats to economic growth stemming from global trade conflicts and internal political uncertainties. This initiative comes on the heels of previous support efforts targeted at the automobile and semiconductor sectors, which are critical to South Korean exports to the U.S. and now face challenges from American tariffs. Acting President Han Duck-soo has cautioned about potential liquidity problems and broader financial market instability. Of the proposed budget, KRW 8.1 trillion will be financed through the issuance of government bonds. The allocation of this budget includes KRW 2.1 trillion set aside for measures to mitigate trade risks, KRW 1.8 trillion for advancements in artificial intelligence, KRW 4.3 trillion to support small businesses, and KRW 3.2 trillion for disaster recovery efforts. The fiscal deficit is anticipated to increase to 3.2% of GDP, with the national debt expected to reach 48.4%. Additionally, the government intends to increase sales of foreign currency bonds to $3.5 billion as a strategy to stabilize market volatility.
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