South Korea approves 26.2 trillion won extra Budget to help cope with Iran war
The package includes President Lee’s flagship consumer voucher handout programme
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[SEOUL] South Korea’s parliament approved a supplementary government Budget of 26.2 trillion won (S$22.5 billion) on Friday (Apr 10) to mitigate the domestic economic impact of the Iran war.
The spending plan, initially proposed by the government in late March, is the second extra Budget under the liberal administration of President Lee Jae-myung, who took office in June 2025.
The government plans to implement the extra Budget as soon as possible to minimise the economic shock from a surge in oil prices.
The package includes Lee’s flagship consumer voucher handout programme, which provides payments ranging from 100,000 won to as much as 600,000 won per person for those in the bottom 70 per cent of income earners.
The Budget also includes spending to maintain nationwide fuel price caps, introduced last month for the first time in nearly three decades, for about six months, in a country that is almost entirely dependant on imports for its energy.
Amid high oil prices, South Korea’s consumer inflation quickened in March, with policymakers warning of upside risks in the months ahead, while the cost of imports grew at the strongest pace since September 2022.
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On Friday, the country’s central bank held interest rates steady, maintaining a cautious stance as the conflict in Iran threatens to heat up inflation and weigh on growth. REUTERS
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