The Ministry of Economy and Finance announced the downward revision in its annual economic policy direction, signaling the possibility of supplementary budget if needed to bolster the economy.
"We will review various measures," Economic Policy Bureau Executive Director Kim Jae-hoon said when asked whether a supplementary budget would be included in additional economic stimulus measures.
The government plans to front-load about 40 percent of its 85 trillion won (US$57.9 billion) allocated for welfare and economic projects in the first quarter, while preparing 18 trillion won for local governments as public sector resources.
To support domestic consumption, the administration will implement a 30 percent tax cut on automobile purchases in the first half of the year and double the credit card income deduction rate to 30 percent for small business transactions.
The finance ministry will expand its foreign exchange swap limit with the National Pension Service to $60 billion from $50 billion and extend the maturity until the end of 2025 to help stabilize currency markets.
For foreign investment promotion, the government will execute its 200 billion won cash support budget for the first half of 2025 while raising both support limits and federal cost-sharing ratios from 5 to 20 percentage points and from 10 to 25 percentage points respectively.
The ministry also unveiled plans to distribute 1 million accommodation vouchers worth up to 30,000 won each for stays outside the Seoul metropolitan area and is considering visa-free entry for Chinese group tourists.
To tackle rising food prices, the government will allocate 11.6 trillion won, up 7.4 percent from last year, with plans to deploy over 80 percent of the agricultural, livestock, and fisheries price support budget in the first half of the year.
The administration also announced an assistance package for young adults, including expanded job experience opportunities for 10,000 more and financial incentives of up to 4.8 million won for youth employment in vacant positions, while raising the monthly government contribution limit for youth savings accounts to 700,000 won.
The implementation of these policies may be modified amid political uncertainties, as economic policies announced during former President Park Geun-hye's impeachment in 2016 were largely discarded after the Moon Jae-in administration took office six months later.
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