S. Korea moves closer to finalizing supplementary budget of 13.8 trillion KRW

A supplementary budget aimed at addressing disaster recovery, boosting exports, and supporting vulnerable groups comes following days of cross-party negotiations.

The result is a compromise to expand the amount in the final package.

Our Moon Hye-ryeon reports.

South Korea has taken a major step toward finalizing its first supplementary budget in three years — and the first drafted under an acting president.

The two main political parties reached an agreement on Thursday to expand the package to 13-point-8 trillion Korean won, roughly 9-point-6 billion U.S. dollars, up from the government's original 12-point-2 trillion won proposal.

The budget targets three main priorities: disaster recovery, boosting exports and strategic technologies, and supporting vulnerable communities.

A major driver of the budget's expansion is the response to devastating wildfires, which prompted an additional 200 billion won for disaster relief.

This will help double the national disaster reserve and upgrade emergency equipment such as drones and AI surveillance systems.

As global trade tensions and export slowdowns persist, the budget allocates 4 trillion won for high-tech industries, including policy financing, export programs, and AI semiconductor investment.

Another key addition is 400 billion won for regional gift certificates, aimed at boosting consumption in small businesses and traditional markets.

Funding for agricultural discounts has been expanded, along with scholarships for university students.

With the IMF reducing South Korea's 2025 growth outlook to one percent, more funds have been directed to construction projects to stimulate domestic demand.

Experts say this could be vital for job creation and economic recovery.

"Reviving the construction sector can have a strong ripple effect. It helps boost employment among low-income, unskilled workers and contributes to faster recovery in domestic demand."

The supplementary budget also targets small businesses and vulnerable groups.

Measures include a new "burden-relief credit" for electricity and insurance bills, traditional market vouchers, and expanded loans for students and low-income youth.

This emergency budget may serve as a stepping stone for more extensive fiscal action later this year.

Moon Hye-ryeon, Arirang News.