South Korea drafts second extra budget as new leader seeks to spur growth
SEOUL: South Korea's new administration proposed on Thursday (Jun 19) US$14.7 billion of extra government spending to support sluggish domestic demand, as President Lee Jae Myung makes economic recovery his top policy agenda.
The supplementary budget plan totalling 30.5 trillion won announced by the finance ministry includes 20.2 trillion won (US$14.7 billion) of new spending to spur economic growth and support vulnerable sectors, while it will also make up for 10.3 trillion won from an expected shortfall in tax revenue.
The second extra budget of the year comes two weeks after Lee, who has vowed expansionary fiscal policy, won a snap presidential election on Jun 3 and less than two months since the first supplementary budget of 13.8 trillion passed in May.
"Economic conditions and difficulties in people's livelihoods are very serious, and this extra budget means government finances will play a little more active role," Vice Finance Minister Lim Ki-keun told a media briefing.
South Korea's central bank last month slashed its economic growth forecast for this year to 0.8 per cent from 1.5 per cent, citing heightened uncertainty over US tariffs, as it lowered interest rates for a fourth time in its current easing cycle and signalled more rate cuts.
Asia's fourth-largest economy unexpectedly contracted in the first quarter amid US President Donald Trump's sweeping tariffs and domestic political turmoil sparked by former President Yoon Suk Yeol's martial law decree in December.
The biggest spending will be Lee's flagship policy of a universal cash handout scheme for consumers, providing 150,000-500,000 won in vouchers to every citizen and totalling 10.3 trillion won.
Lee was one of the first to introduce a cash handout scheme in South Korea when he was mayor of Seongnam City, which was adopted nationwide several times during the COVID-19 pandemic under the previous liberal administration of Moon Jae-in, even as critics questioned the effectiveness of the policy.
Other spending plans include financial support for the construction sector, investment in artificial intelligence as well as small and medium-sized enterprises, and debt restructuring programmes for small businesses.
Out of the combined total of 30.5 trillion won, 19.8 trillion won will be financed by issuing additional treasury bonds, according to the finance ministry.
The second extra budget will raise the country's fiscal deficit to 4.2 per cent of gross domestic product (GDP) this year, up from the previous estimate of 3.3 per cent after the first extra budget, and government debt to 49.0 per cent of GDP, from 48.4 per cent.
The government will submit the proposal to parliament, controlled by the left-leaning ruling Democratic Party, on Jun 23.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
an hour ago
- CNA
AI is transforming every industry and enabling creativity: AWS
CNA's Sarah Al-Khaldi speaks to Olivier Klein, Chief Technologist for Asia Pacific and Japan at Amazon Web Services, on the sidelines of the SuperAI Singapore. He discusses how AI is reshaping industries, fuelling innovation and raising important concerns about its impact on workforces across the globe.
CNA
an hour ago
- CNA
Amazon to invest $233 million in India to expand operations infrastructure, improve tech
Amazon will invest more than 20 billion rupees ($233 million) in India in 2025 to expand and update its operations infrastructure, develop new technology for its fulfilment network and improve delivery safety, it said on Thursday. The investment builds on top of Amazon's prior investments for the creation of an operations network to deliver to all serviceable pin-codes in the country, it added. In June 2023, the e-commerce major - which competes with Walmart's Flipkart and billionaire Mukesh Ambani's Reliance Retail in India - had said it will take its investments in the country to $26 billion by 2030, without providing a breakdown. The new investment will be used to launch new sites and upgrade existing facilities across its fulfilment and delivery network, improving speed and processing capacity, it said. Additionally, Amazon plans to use technology to alert delivery associates about unsafe speeds and ensure equitable distribution of delivery routes. Some of the funds will also be used to expand initiatives to improve the health and financial well-being of its employees, the company said. In March, India's information technology ministry said Amazon's cloud services provider, Amazon Web Services, will invest about $8.2 billion in the country. ($1 = 86.7100 Indian rupees)
Independent Singapore
an hour ago
- Independent Singapore
No WFH, overworked, and underpaid — Singapore worker says he's stuck in a 'broken' company
SINGAPORE: A local worker took to social media on Wednesday (June 18) to share that he's stuck in a 'broken' company where he's overworked, underpaid, and mentally exhausted. Posting on the r/askSingapore forum, he wrote that even though it's already 2025, his company still insists everyone show up at the office five days a week, with zero flexibility for remote work. He also mentioned that the most draining part isn't the workload itself but the fact that he spends more time 'managing upwards' than doing the job he was hired to do. He said, 'I have to remind my bosses about their own meetings, teach them how to convert a PDF (no joke), copy our own client feedback into decks because they forgot, and clarify client concerns that were literally caused by said bosses. Even our clients are starting to complain about our boss to us. That says a lot.' To make matters worse, he says he's severely underpaid for the ridiculous amount of 'labour and mental stress' he's forced to carry every single day. Despite these difficulties, the worker noted that his immediate team has remained a source of support and stability throughout his time at the company. 'I really love my immediate team. We're solid, supportive, and honestly, the only reason I haven't rage-quit yet,' he said. See also What's holding blockchain back from mainstream adoption? Still, the worker admitted that quitting is constantly on his mind due to how exhausted he feels. At the same time, he said he feels 'stuck', as he has been struggling to find a new job despite trying. 'Interviews are hard to attend when you're stuck in the office full-time. I've taken a few MCs to slip out for interviews, but half of them aren't even worth it — lowball offers, chaotic setups, or just plain red flags,' he wrote Seemingly at a dead end, he turned to the community for support, writing, 'How are people juggling full-time jobs (with no WFH) while job hunting in this climate? Looking for advice, hacks, or just solidarity.' 'Do some screening before you go for interviews.' Plenty of responses quickly poured in, with many users encouraging the worker to be more 'selective' when it comes to job applications. Some suggested doing proper research before agreeing to interviews—such as checking company reviews on sites like Glassdoor or Reddit—and only pursuing roles that offer decent pay and a healthier work culture. They pointed out that it's not worth wasting time and energy on companies that already show red flags. As one user put it, 'Only go for interviews that show promise. Basically, quality over quantity. It will save you more energy, too.' A few others also shared practical tips on how to attend interviews without raising suspicion at work. One common suggestion was to request Zoom interviews instead of in-person ones and to schedule them during lunch breaks or just before or after working hours. This way, he could still explore new opportunities without needing to take medical leave or make up excuses to leave the office. One user shared their experience, writing, 'Personally, I try to schedule my interviews during lunchtime or right after work if I can. I haven't had a potential employer turn me down on such a request, especially if you mention that you're full-time WFO now. They should understand, as most companies are mandating RTO. And even if you get turned down, hey, you dodged a bullet!' Another added, 'For some lowball offers, you should do some screening before you go for interviews. Talk to HR. Just ask if they are willing to pay more than X amount. If they are going to cut you because of that, it's pointless to continue anyway. You can also try to put a couple of interviews in one day, and usually, if it's not the first round, ask to take those remotely. I tend to go in for the hiring manager round, but for subsequent rounds, I will request to do them remotely. If you are nearby, ask for lunchtime interviews.' In other news, a 23-year-old international student currently doing her Master's at SMU opened up online about her difficult job search experience, saying that she feels 'completely lost' after months of trying to land a full-time role in Singapore. In a post on r/SGexams, she shared that despite maintaining a perfect GPA of 4.0 and having several internships and work experiences under her belt, she has yet to receive a single offer. She also said she has applied to over 130 companies since arriving in Singapore, but has faced constant rejections or complete silence. Read also: 'I've applied to 130 jobs' — 23 y/o international student in Singapore opens up about her job hunt struggles SingapoFeatured image by freepik (for illustration purposes only)
