President Lee picked economy as first priority, how will supplementary budget help?

A major task of the new administration is to hammer out a supplementary budget to boost spending and to bolster the economy.

So where do we stand?

Our business correspondent KIM Do-yeon tells us.

As President Lee Jae-myung started his term right after winning the election on June 4th, he picked the economy as his number one priority.

He, in fact, kicked the task force off as his first executive order has called two meetings so far.

This comes against the backdrop of South Korea's economy struggling, with the Korea Development Institute labeling the current situation "subdued."

For the first quarter, the nation's economy shrank.

The country's gross domestic product from January to March shrank by point-two percent on quarter, unchanged from an estimate in April.

During the second meeting the first thing he ordered the task force to look into was a supplementary budget.

Plus, President Lee has the backing of the parliament, with the ruling Democratic Party holding the majority to pass with DP lawmakers calling for at least 20 trillion Korean Won or 14.5 billion U.S. dollars.

"We'll introduce a supplementary budget to ease the burden on people's daily lives and deliver policies that make a real difference. At the same time, we won't stop investing in South Korea's future."

While the specifics are yet to come out, one thing to look out for is the distribution of cash.

Lee has been pushing for a universal payment of 250,000 won to everyone.

This is something that could help certain industries, especially with hotels and restaurant businesses struggling due to weakened spending.

"Providing payments in the form of local currency can help boost the regional economy, so we could see a temporary increase in spending—particularly in sectors like services, lodging, and dining—which may lead to a slight uptick in employment."

Meanwhile, taking on prices is another issue.

Universal payments could raise concerns over inflation.

On the other hand, the Bank of Korea has actually backed the supplementary budget, and it wouldn't affect the inflation too much.

In fact, the BOK says a speedy one is necessary.

Another expert also said the supplementary budget needs to focus on the construction sector to support the national economy.

"In construction, every 1 billion won in revenue creates around 12 jobs. It's an industry where working-class people—those who rely on labor to make a living—benefit the most."

In addition, there needs to be investments made to make sure industries struggling from U.S. tariffs can survive the hard times.

This includes steel and auto makers.

Plus, sectors like AI need consistent development, and funds could be used to make sure the nation's strategic industries don't lag behind.

Kim Do-yeon, Arirang News.