South Korea parliament approves 31.8 trillion won extra budget to bolster economy
The spending plan that parliament approved is larger than 30.5 trillion won proposed by the government. The government will hold a cabinet meeting on Saturday to adopt the revised budget, the Finance Ministry said.
Lee inherited an economy facing weakening demand after months of national turmoil triggered by ousted leader Yoon Suk Yeol's failed martial law decree in December.
The economy unexpectedly contracted in the first quarter against the backdrop of U.S. President Donald Trump's sweeping tariffs and is seen expanding a mere 0.8% this year, according to the Bank of Korea.
South Korea's government debt will rise to 49.1% of gross domestic product, from 48.4%, and fiscal deficit to 4.2% from 3.3%, as 21.1 trillion won out of the total will be financed by issuing additional bonds.
($1 = 1,362.3000 won)
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Without efficient official channels, businesses often resort to informal networks for quicker transactions. : A small textile factory importing fabric from China could make payments smoothly through banking channels, avoiding hawala. This transparency builds trust with suppliers and ensures compliance. Without efficient official channels, businesses often resort to informal networks for quicker transactions. For Freelancers and IT Firms : Instant payments for software or cloud services enhance productivity, competitiveness, and revenue generation. Without efficient payment systems, freelancers often rely on third parties with international accounts, further fueling the informal market. : Instant payments for software or cloud services enhance productivity, competitiveness, and revenue generation. Without efficient payment systems, freelancers often rely on third parties with international accounts, further fueling the informal market. For Individuals: Students, patients, and travelers could make payments without facing delays or overpaying in the open market. For instance, parents may need to urgently send tuition or living expenses to universities abroad, and patients may need to pay for medical treatments. Ultimately, every outbound transaction conducted through official channels is one less for hawala networks, making it harder for them to operate. How Tight Outbound Controls Can Unintentionally Boost Hawala and Affect Inbound Remittances Regulators often impose strict controls on outbound payments to preserve foreign currency reserves, which are crucial for paying for urgent imports like fuel, food, and medicine. While this strategy may seem logical in the short term, it creates a chain effect that harms the economy over time. Think of Bangladesh's cross-border financial flows as two interconnected buckets—one for Taka inside Bangladesh and one for foreign currency outside. 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By simplifying and digitizing legal outbound transfers, the country can: Reduce reliance on hawala networks, Increase inbound remittances through official banking channels, Strengthen reserves sustainably, Empower SMEs, freelancers, and individuals to expand globally, Stimulate growth in the cross-border payments industry. This approach will create a healthier, more transparent financial system that supports long-term economic growth and stability.
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