The Ministry of Economy and Finance announced on Tuesday in a cabinet meeting that 431.1 trillion won (US$299.7 billion) of the total 574.8 trillion won budget would be allocated for the first six months of 2025, with 276.7 trillion won specifically preserved for the first quarter.
The accelerated spending plan comes as global investment banks and credit rating agencies warn of mounting downside risks to Korean economy, citing political instability following President Yoon Suk Yeol's impeachment by the National Assembly.
"We must mobilize all available resources, including state finances, public institutions, and private investments, to help our economy regain its vitality as soon as possible," Acting President and Prime Minister Han Duck-soo said at the cabinet meeting.
Nomura Holdings, the Japanese investment bank, noted that while the impeachment vote may shorten the period of political uncertainty, growth pressures persist and unlike previous impeachment scenarios, a weakening won could limit the central bank's monetary policy options.
Several foreign banks project additional stimulus measures in early 2025, with New York City headquartered Citibank forecasting a supplementary budget of about 30 trillion won in the first quarter.
The finance ministry said it would prioritize support for vulnerable social groups, small business owners, and the advancement of high-tech industries, emphasizing thorough preparation for efficient budget execution from the start of the year.
Copyright ⓒ Aju Press All rights reserved.