South Korea Eyes Supplementary Budget Amid Economic Slowdown

South Korea is considering introducing a supplementary budget next year to address declining consumer spending and economic growth. The government aims to support domestic demand and reduce inequality. The proposed budget for 2025 is set at 677.4 trillion won, marking a 3.2% increase from the previous year.

South Korea is deliberating on the possibility of drafting a supplementary budget at the onset of the upcoming year due to faltering consumer expenditure and a slowdown in economic growth, according to a report in the Chosun Ilbo daily on Friday, citing anonymous presidential sources.

Despite President Yoon Suk Yeol's government's commitment to fiscal prudence as tax revenues wane, there's recognition of the need for increased spending to stimulate domestic demand, assist vulnerable populations, and address income and educational disparities. Economic conditions have shifted substantially since the government outlined its 2025 fiscal plan in August.

The finance ministry has proposed a total government expenditure of 677.4 trillion won for the next year, representing a 3.2% rise from 2024, which is a slightly larger increase compared to this year's lowest boost since 2005. Yoon's office did not comment on the report.

(With inputs from agencies.)