A supplementary budget bill ordered by President Lee Jae-myung to counter an economic slowdown triggered by Middle East tensions is expected to be submitted to the National Assembly as early as this week. The ruling Democratic Party of Korea has appointed a chair to the previously vacant Special Committee on Budget and Accounts, preparing for swift passage. The opposition People Power Party is gearing up to make major revisions, calling the supplementary budget "vote-buying ahead of local elections."
On the 15th, President Lee emphasized the need for budget passage during a dinner with first-term Democratic Party lawmakers. Spokesperson Park Ji-hye said, "The president sought cooperation, saying the National Assembly must pass the supplementary budget because local commercial districts are struggling."
The supplementary budget bill is expected to be submitted to the National Assembly as early as this week. Rep. Jung Tae-ho of the Democratic Party, a member of the National Assembly's Strategy and Finance Committee, said, "Given that the president ordered emergency preparation, the supplementary budget bill is expected to be submitted to the National Assembly as early as this week." The ruling party currently projects a bill worth 15 trillion to 20 trillion won ($10.5 billion to $14 billion). The presidential office reportedly held a meeting of vice ministers from relevant agencies, chaired by Policy Chief Kim Yong-beom, to review the budget's details.
The Democratic Party is signaling rapid passage, noting that excess tax revenue eliminates the need for government bond issuance. Another Democratic Party lawmaker on the finance committee said, "Speed is essential for supplementary budgets. Additional tax revenue from the semiconductor industry boom means no bond issuance is needed, minimizing unnecessary debates over fiscal soundness and accelerating deliberations." The party completed preparations by appointing Rep. Jin Sung-joon as chair of the Special Committee on Budget and Accounts.
The supplementary budget is expected to include energy vouchers for vulnerable groups such as small business owners and farmers to cope with high oil prices. Expanded government subsidies for tax-free fuel for farms are also being discussed. A Democratic Party official explained, "We are reviewing budget increases for tax-free fuel support and extending the sunset provision for agricultural and fishery tax exemptions scheduled to expire at year's end."
Support for industries and farms facing cost burdens and supply disruptions from rising raw material prices is also expected. Last year's supplementary budget included approximately 250 billion won for securing raw materials and stabilizing supply chains for key minerals, plus about 25.5 billion won for fertilizer price subsidies for farmers.
Local currency issuance to stabilize neighborhood commercial districts is also being pursued. At a senior staff meeting on the 12th, President Lee said, "Distributing funds in the form of local currency would have a dual effect of converting into sales for small businesses and local commercial areas."
Additionally, expansion of the trade insurance fund to address trade risks from the Trump administration is expected. The previous supplementary budget allocated approximately 700 billion won for trade insurance fund expansion and tariff response vouchers to counter U.S. tariff measures.
The People Power Party maintains that the supplementary budget is "politically motivated cash distribution" targeting local elections and could fuel inflation.
PPP Policy Committee Chair Jung Jum-sik said, "Supplementary budgets are supplementary and temporary policy tools. Excessive fiscal expansion must consider the risk of exacerbating so-called 'stagflation'—simultaneous economic stagnation and inflation."
Chief Spokesperson Park Sung-hoon criticized, "This supplementary budget will be a signal for price explosions, not livelihood stability. Broad money supply (M2) has already surpassed 4,000 trillion won, hitting record highs. The supplementary budget is tantamount to dropping a bomb on ordinary people's grocery bills."
In response to opposition criticism, the Bank of Korea aligned with the government, expressing a positive view on the budget. In materials submitted to Rep. Cha Gyu-geun of the Rebuilding Korea Party, the BOK stated, "The possibility that supplementary budget preparation will stimulate prices through demand-side pressure is relatively low."