South Korea’s Deputy Prime Minister and Finance Minister Choi Sang-mok said on April 26 that the government would approach discussions on the supplementary budget with flexibility.
His statement comes as lawmakers continue to call for an increase in the 12.2 trillion won supplementary budget proposed by the government, following a 0.2% contraction in first-quarter growth (January-March) compared to the previous quarter.
Speaking via video link from Washington, D.C., where he was attending a macroeconomic and financial briefing (F4 meeting), Choi acknowledged the gravity of the economic situation and indicated the government’s openness to expanding the supplementary budget to stimulate growth.
South Korea’s economy has now posted four consecutive quarters of growth at or below 0.1%, a trend not seen since the 1997 Asian financial crisis, the 2008 global financial crisis, and the 2020 COVID-19 pandemic.
Choi, along with Bank of Korea Governor Rhee Chang-yong, attended the Spring Meetings of the International Monetary Fund (IMF) and the World Bank in Washington. Meanwhile, Financial Services Commission Chairman Kim Byeong-hwan and Financial Supervisory Service Chairman Lee Bok-hyeon participated remotely from South Korea.
However, Choi emphasized that any increase in the supplementary budget would need to align with the principle of fiscal responsibility, ensuring that taxpayers' money is spent effectively.
He added that such a move would only proceed if it could be processed quickly.
This suggests that the government is likely to focus on economic stimulus measures, rather than controversial proposals like the “25,000-won relief payment for every citizen,” a central policy of Democratic Party presidential candidate Lee Jae-myung.
Choi also assessed the first-quarter GDP growth, attributing the slowdown to rising domestic and external uncertainties, delays in recovering economic sentiment, and exceptional events such as heavy snowfall, cold waves, wildfires, and bridge collapses.
He pointed out that these factors contributed to weak performance in the construction sector. “As the decline in construction investment continues, we will carefully examine the factors behind the slowdown across both the private and public sectors, particularly in construction and civil engineering, and explore fundamental measures for revitalization,” Choi said.
