South Korea Urges Swift Approval of Extra Budget Amid Economic Slowdown

South Korea's acting President and Finance Minister, Choi Sang-mok, has called for swift parliamentary approval of a supplementary budget to support the struggling economy. The country faces weakening domestic demand and rising external uncertainties, prompting growing calls for fiscal intervention.

Choi emphasized the need for an agreement on budget principles, aligning with recent remarks from ruling People Power Party floor leader Kweon Seong-dong, who signaled openness to discussions. This follows a proposal from the opposition Democratic Party for an extra budget of at least 30 trillion won ($20.65 billion).

South Korea's economy, the fourth largest in Asia, barely expanded in the fourth quarter of 2024 due to its worst political crisis in decades. The downturn, exacerbated by rising global risks under U.S. President Donald Trump's second term, has heightened concerns over economic stability. The Bank of Korea forecasts growth to slow to 1.6%–1.7% in 2025, down from 2.0% last year.

Economists and the central bank governor have urged the government to introduce additional stimulus measures. Choi also addressed concerns about potential U.S. tariffs, particularly in the biopharmaceutical sector. The South Korean government plans to implement support measures for domestic firms and seek export market diversification to mitigate adverse effects.

To bolster economic resilience, the government will enhance support for the biopharmaceutical industry and assist companies in establishing connections with U.S. manufacturing facilities. These efforts aim to sustain growth and counter external pressures.

With mounting economic challenges, swift parliamentary action on the extra budget remains crucial for stabilizing the economy and ensuring continued support for domestic industries.