In his inaugural address to parliament, South Korean President Lee Jae-myung on Thursday called for the swift approval of a $22.5 billion (30.5 trillion won) supplementary budget designed to invigorate the nation’s flagging economy. The appeal comes just weeks after Lee assumed office following a snap election prompted by the impeachment of his predecessor, Yoon Suk-yeol.
President Lee’s urgent plea highlights the economic challenges facing Asia’s fourth-largest economy, which is heavily reliant on exports. South Korea has been significantly impacted by steep tariffs imposed by US President Donald Trump. In April, the United States levied a 25 percent tariff on South Korean goods as part of broader global trade measures. Although these tariffs were subsequently put on a 90-day hold, giving both sides until July to negotiate a resolution, the threat of sustained trade barriers looms large.
“Timing is everything when it comes to the economy, and now is the time to act,” President Lee told lawmakers in the main chamber of parliament. He emphasized the package’s design for rapid implementation, stating, “To overcome the downturn and restore livelihoods, we have drafted a supplementary budget totalling 30.5 trillion won.”
A significant portion of the proposed spending – over 40 percent – is earmarked for universal consumption coupons, allowing eligible individuals to receive up to 520,000 won ($380) each. Lee described this measure as “the minimum” his administration could do to inject vitality into the economy.
The president cited concerning economic indicators, noting that economic growth has remained below one percent for four consecutive quarters, culminating in negative growth during the first quarter of this year. Both private consumption and government spending also contracted in the first quarter, while official data showed consumer prices rising to 1.9 percent in May year-on-year.
Given that President Lee’s centre-left Democratic Party holds a majority in the 300-seat legislature, the supplementary budget is widely expected to pass.
Beyond economic policy, President Lee also addressed foreign relations, specifically reaffirming his campaign commitment to pursue unconditional dialogue with Pyongyang. He stressed that peace on the Korean peninsula is fundamental to economic growth, articulating a vision where “peace drives economic growth, which in turn further strengthens peace.”
President Lee Jae-myung’s tenure begins at a precarious time for South Korea, as the nation finds itself navigating a delicate balance between its traditional security guarantor, the United States, and its largest trade partner, China, amidst an escalating superpower standoff.
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