South Korea to prepare extra budget in response to Middle East tensions

On March 12, South Korean President Lee Jae Myung instructed his administration to promptly prepare an additional budget to stabilise public welfare and support economic recovery amid the escalating situation in the Middle East.

At a meeting with senior aides, he stressed that rising regional instability could negatively affect consumer and investor confidence, Caliber.Az reports, citing Yonhap News Agency.

Lee urged the acceleration of budget preparation, which normally takes one to two months, and called for using the crisis as an opportunity for national economic reforms.

“We also need to swiftly inject funds to ensure that people's livelihoods and the economic recovery do not lose momentum, especially in times of crisis. A supplementary budget is unavoidable, so I ask that it be drafted as quickly as possible," he stressed.

The president also highlighted the need to mitigate the impact on vulnerable groups, proposing measures such as freezing utility charges for the first half of the year, expanding discounts on agricultural products, and providing fuel subsidies for farmers.

In addition, Lee Jae Myung noted the anticipated approval by the National Assembly of a special bill authorising South Korea’s $350 billion investment in the United States, including the creation of a strategic investment fund to implement a series of memorandums of understanding.

The president called on both ruling and opposition parties to unite for the effective implementation of these measures and to turn the crisis into a stimulus for the modernisation of the country’s economy and industry.

South Korea primarily imports energy resources from the Middle East, including crude oil, petroleum gas, and petrochemical products, which account for over 80% of its oil and 50% of its gas supply. Key suppliers are Saudi Arabia, the UAE, and Kuwait.

By Bakhtiyar Abbasov