Hong Ik-pyo, senior presidential secretary for political affairs, said Wednesday that if the Middle East situation becomes prolonged, "we are cautiously forecasting that an additional supplementary budget may be needed in the second half, even after this supplementary budget."
Hong made the remarks during an appearance on MBN's "Jung Woon-gap's In-Depth Analysis." He noted that domestic and international economic institutions have lowered their 2025 growth forecasts for South Korea by around 0.4 percentage points due to the recent Middle East war. He also pointed out that gasoline prices remain in the mid-1,900 won range despite government measures including fuel tax cuts.
"We don't know how many more months the Middle East war will last, and even if it ends, the supply chain for crude oil and other commodities won't normalize immediately — it takes at least three to four months," Hong explained. His remarks suggested that the current supplementary budget is unavoidable and that additional supplementary spending may be necessary in the longer term.
Regarding concerns over a weakening tax revenue base, he said, "Even by conservative estimates, this level of supplementary budget can be financed without issuing government bonds, and tax revenues are likely to come in slightly higher than the government's initial projections." He added, "Considering the current trajectory, this is a crisis the government can fully manage."
On concerns about potential shortages of pay-as-you-throw garbage bags amid naphtha supply instability, Hong said, "There are no significant issues for approximately the next three months."
Hong struck a cautious tone on U.S. President Donald Trump's continued pressure on South Korea and other allies to deploy troops for the management of the Strait of Hormuz. "We are maintaining a very cautious stance," he said. "The United States has not officially requested South Korea to deploy troops."
"Every country feels considerable diplomatic burden regarding the deployment of combat troops or military support, and this war did not begin under diplomatic consultation or close cooperation," Hong said. "At the UN Security Council level, it is also difficult to reach any conclusion due to opposition from China and Russia." He added, "In that regard, we also face significant limitations in providing support under international law."