Gov’t finalizes $22 bn extra budget to spur growth

Gov’t finalizes $22 bn extra budget to spur growth

최초입력 2025.06.20 10:51:21

(Kim Ho-young)

South Korean President Lee Jae-myung on Thursday confirmed the new government’s supplementary budget proposal totaling 30.5 trillion won ($22.2 billion) as he presided over the 26th Cabinet Meeting at the presidential office in Yongsan, central Seoul.
“The downturn in the private sector is so severe that it is time for the government to take an active role,” Lee said. “I believe the supplementary budget should be further expanded.”
Lee also noted that consumer sentiment has remained depressed since the declaration of martial law on December 3, 2024, and that there are reports from the field that even regular customers have stopped coming.
“While the atmosphere is gradually recovering, ordinary citizens are still experiencing significant hardship.” Lee said. “The essential role of government finances is to cool the economy during overheating and to boost it during downturns.”
He noted that fiscal soundness is important, but now is the time to use national finances.
According to the new supplementary budget plan, a total of 13.2 trillion won will be allocated to the People’s Livelihood Recovery Consumption Coupon program, which will provide every citizen with between 150,000 and 500,000 won, depending on income level.
It is a compromise that combines universal and targeted support.
“The core of this supplementary budget is economic stimulation and fairness,” Lee said. “While all citizens should benefit, I hoped it would be designed to focus more on those in need, and the Ministry of Economy and Finance took this into account.”
The supplementary budget also includes 600 billion won to support the issuance of regional gift certificates.
The total amount of local currency issued by local governments nationwide will reach a record 29 trillion won.
Second Vice Minister of Economy and Finance Lim Ki-keun noted that this supplementary budget “will have the effect of raising this year‘s growth rate by 0.1 percentage point.”
The government will also introduce a special debt adjustment package for 1.43 million small business owners with weak credit.
As part of the package, 16 trillion won worth of long-term delinquent debt - under 50 million won and overdue for more than seven years - will be written off.
The new supplementary budget plan consists of 20.2 trillion won in fiscal spending and 10.3 trillion won in revenue adjustments.
The government plans to submit the budget proposal to the National Assembly on Monday.
If the proposal passes, total government spending for this year will surpass 700 trillion won for the first time in history.
The managed fiscal deficit is projected to reach 110.4 trillion won and national debt will increase to 1,300.6 trillion won.
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Gov’t finalizes $22 bn extra budget to spur growth

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