The government-prepared supplementary budget proposal amounting to 12.2 trillion won is expected to spark heated debates in the National Assembly. The Democratic Party of Korea, which holds the largest number of seats in the National Assembly, insists that a larger supplementary budget is necessary than the one submitted by the government, stating that additional funds should be allocated for local currency budgets.
On the 18th, the government reviewed and approved the first supplementary budget proposal for 2025 at the Cabinet meeting. The government plans to submit the approved supplementary budget proposal to the National Assembly on the 22nd.
The government initially considered a 10 trillion won supplementary budget but increased it by about 2 trillion won. This decision reflects opinions from the National Assembly and experts who believe that 10 trillion won is insufficient for crisis response and economic stimulus.
However, the Democratic Party of Korea holds the view that "even 12 trillion won is insufficient." The party argues that at least 15 trillion won must be invested for crisis response and economic stimulus.
The Bank of Korea also believes that a supplementary budget exceeding the government's proposal is necessary. Bank of Korea Governor Lee Chang-yong noted in February that "a supplementary budget of 15 to 20 trillion won is appropriate." The internal assessment at the bank indicates that the scale of the supplementary budget proposed by the government is inadequate to overcome the current economic crisis.
The government has finalized the supplementary budget proposal by selecting only the essential minimum items while considering the national financial situation but stated that it would respond "flexibly" to any increases. The government does not welcome delays in processing the supplementary budget while firmly insisting that "increases are absolutely not allowed."
Vice Minister Kim Yoon-sang left room for discussion during the supplementary budget briefing, saying, "There’s nothing that cannot be done." Vice Minister Kim further emphasized that "the nature of the increase and the purpose of the project are key," indicating that certain boundaries would be drawn. This implies that the government will evaluate the intention and effectiveness of the projects.
A representative project where the government's and the Democratic Party of Korea's views diverge is the "local love gift certificate" (local currency). The Democratic Party of Korea is determined to include the local currency project in the supplementary budget. Jin Sung-jun, chair of the Democratic Party's policy committee, stated, "Issuing local currency is indeed a policy that achieves the greatest effect with the smallest budget," insisting that the local currency project must be included in the supplementary budget.
However, Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok indirectly expressed a lack of intention to reflect this in the supplementary budget during a government questioning on the economy on the 15th, stating, "I have many doubts about the economic effects of uniform and temporary cash payments."
Meanwhile, the Korea Development Institute (KDI), a national research institute, argues that it is difficult to consider the current economic situation as a "recession" and that caution should be exercised in preparing the supplementary budget. Jeong Gyu-cheol, head of KDI's Economic Outlook Office, told ChosunBiz, "While the economy is unstable and there are high downward pressures, it does not meet the criteria for a "recession" required for preparing a supplementary budget." Jeong continued, "Rather than a supplementary budget, easing monetary policy such as lowering the key interest rate should take precedence."