The South Korean government is considering drafting a supplementary budget early next year to counter sluggish domestic demand and a slowdown in economic growth, officials said Tuesday. The move would come in addition to the 2024 budget currently under review in the National Assembly, aimed at revitalizing the economy and easing the burden on households.
A senior official from the presidential office noted that the government would conduct a detailed analysis to determine the financial resources required to achieve its policy goals. “If necessary, we may consider a supplementary budget,” the official said. While President Yoon Suk-yeol’s administration has maintained a policy of fiscal prudence since taking office, the official acknowledged that “this is a time to think about an active fiscal role.”
The government submitted a 2024 budget plan in September totaling 677 trillion won ($520 billion). However, a high-ranking official explained that the economic environment has significantly changed since then. “There are new fiscal initiatives that were not included in the original budget plan,” the official said. Since Yoon’s inauguration in May 2022, his administration has introduced only one supplementary budget.
The proposed supplementary budget would focus on boosting domestic consumption, expanding welfare programs for vulnerable groups, and addressing income and education inequality—key priorities Yoon has outlined for the latter half of his term. This shift signals a departure from the administration’s earlier reluctance to expand fiscal spending to address economic fluctuations.
Meanwhile, the Federation of Korean Industries and senior executives from 16 major companies, including Samsung, SK, Hyundai Motor, and LG, issued a joint statement urging lawmakers to prioritize economic revitalization over regulatory legislation. “Korea’s domestic economy remains structurally stagnant due to household debt issues, and even exports, which have been a pillar of growth, face uncertain prospects due to weakening competitiveness in key industries,” they said.
The statement also criticized proposed revisions to the country’s Commercial Act, which include requiring boards of directors to explicitly prioritize shareholder interests. “If the amendment passes as is, companies will face excessive litigation and increased vulnerability to foreign activist investors, making normal operations and innovation in new growth sectors extremely difficult,” the business leaders warned.
