With the announcement of the Lee Jae-myung government's supplementary budget of 30.5 trillion won, the differences from the previously formulated first supplementary budget are being highlighted. While the first supplementary budget focused on urgent responses to crises like wildfires and changes in the trade environment, the second supplementary budget emphasized economic stimulation and stability for people's livelihoods. As a result, the direction of existing projects like AI and export support has also changed somewhat.
◇ More than half of the second supplementary budget's expenditures focus on 'consumption'... support for vulnerable groups is also increasing
According to the Ministry of Economy and Finance on the 20th, the size of the second supplementary budget submitted by the government to the National Assembly is 30.5 trillion won, which is 2.5 times the first supplementary budget of 12.2 trillion won. Among this, expenditures amount to 20.2 trillion won, while the revenue adjustment stands at 10.3 trillion won.
The most noticeable feature of the second supplementary budget is that more than half of its expenditures are concentrated on expanding national consumption capacity. The government will invest 10.3 trillion won in 'universal livelihood recovery consumption coupons'. Additionally, projects aimed at stimulating consumption include ▲ regional love gift certificates (600 billion won) ▲ high-efficiency home appliance refunds (300 billion won) ▲ 7.8 million discount coupons (100 billion won).
In contrast, related expenditures in the first supplementary budget were limited to 2 trillion won. This included 1.4 trillion won for the coexistence payback, 400 billion won for regional love gift certificates, and 200 billion won for promoting the consumption of agricultural and marine products. At that time, Kim Yoon-sang, the second vice minister of the Ministry of Economy and Finance, noted, "The first supplementary budget focused on urgent issues like wildfire and trade responses, strengthening AI competitiveness, and stabilizing people's livelihoods, rather than stimulating domestic demand."
The Lee Jae-myung government significantly expanded support for vulnerable groups compared to the first supplementary budget. In the first supplementary budget, the relevant budget was 200 billion won, but it was increased to 400 billion won during the National Assembly review process. The representative projects include ▲ national scholarships (100 billion won) and ▲ support for low-income financial assistance (100 billion won). In the second supplementary budget, this has been expanded to 700 billion won. Among this, 400 billion won will be allocated to support housing for youth and newlywed couples without housing, 100 billion won for expanding care and medical support, and another 100 billion won for stabilizing prices.
◇ Both the first and second supplementary budgets allocate about 2 trillion won to construction industry revitalization... could this accelerate the recovery of the construction industry?
The budget for stimulating the construction industry is similar, with the first supplementary budget at 25 trillion won and the second supplementary budget at 27 trillion won.
The first supplementary budget focused on ▲ disaster recovery (11 trillion won) ▲ railway and road projects (600 billion won) ▲ housing supply (700 billion won). It included many projects aimed at responding to incidents such as sinkholes, wildfires, and accidents at Muan International Airport, such as the installation of runway deviation prevention devices, maintenance of sewer pipes, and expansion of sinkhole exploration areas.
In the second supplementary budget, support for ▲ project financing (PF) has been set at 800 billion won, ▲ railway and port projects at 1.4 trillion won, and ▲ renovations of national and public facilities at 500 billion won. Specifically, projects that have gained momentum include the Pyeongtaek-Osong high-speed railway, the Honam high-speed railway, and the Daejeon Subway Line 2. Also included are summer disaster prevention projects aimed at proactively preventing floods and typhoons.
Lee Boo-hyung, a director at the Hyundai Research Institute, stated, "Compared to past supplementary budgets, the budget for SOC projects has increased considerably, which could serve as a catalyst for the recovery of the stagnant construction industry," and added, "In the first half of next year, there will likely be positive effects on the GDP growth rate along with a rebound in the construction market."
◇ AI infrastructure and revitalization, financial support for export corporations shifting to promotional support
Support for AI and export corporations was designated as a key focus in both the first and second supplementary budgets, but there were differences in approach. The first supplementary budget concentrated on building AI infrastructure, especially securing GPUs, while the second supplementary budget focused on ▲ transitions in AI across the bio, cultural, and public sectors ▲ industrial AI solution demonstration projects ▲ development of autonomous manufacturing systems for pharmaceuticals.
A Ministry of Economy and Finance official mentioned, "The first budget focused on establishing AI infrastructure while the second focused on activating the AI industry," noting that "the scale of the second supplementary budget (200 billion won) is smaller than the first supplementary budget (1.8 trillion won) because GPU purchasing expenses are high."
In supporting export corporations, the projects in the first and second supplementary budgets differed. In the first supplementary budget, 1.8 trillion won was allocated for support related to tariff damages, financial support for export corporations, loans, guarantees, and funds. Export vouchers were provided to 8,058 companies, and 200 billion won was allocated for early stockpiling of key minerals.
Conversely, in the second supplementary budget, they decided to enhance marketing through support for discovering alternative markets and the Korean Wave fair. This decision was based on the assessment that the increased financial resources for export vouchers during the first supplementary budget were sufficient. The government allocated an additional 2.4 billion won to support the overseas expansion of K-culture consumer goods like beauty products, food, daily necessities, and goods. They plan to expand participation in the 'New York Korean Wave fair' in November and hold additional Korean Wave fairs in other countries. Additionally, they will invest 2.7 billion won to increase the number of invited overseas buyers and the frequency of trade delegations.
◇ The second supplementary budget includes solar power and venture projects… contingency funds were excluded
The second supplementary budget also includes expansion of solar energy, which was a promise made by President Lee Jae-myung, and an increase in venture investments. For solar power, the government will support 40% of the costs when installing power generation facilities for self-consumption, and provide low-interest loans (1.75%) covering up to 80% of installation costs. This is part of an initiative to increase the proportion of renewable energy as outlined in the 11th basic electricity supply plan. In the venture sector, plans are underway to invest 585 billion won into a fund to induce private investments amounting to 1.1 trillion won. An additional 200 billion won in policy funding for early-stage startups will also be provided.
Meanwhile, while 1.4 trillion won in contingency funds was added in the first supplementary budget, it was not included in the second supplementary budget. A Ministry of Economy and Finance official explained, "Because sufficient general contingency funds were secured in the first supplementary budget, there was no need for an increase this time." If the transfer of the Ministry of Oceans and Fisheries to Busan is pursued in the second half of the year, any additional expenditures arising from disasters such as summer floods and typhoons must be addressed with the contingency funds increased under the first supplementary budget.