The South Korean Parliament approved a complementary budget of 13.8 trillion Won (9.7 billion dollars) on Thursday to support the economy set by slow domestic demand and increasing concerns about the possible repercussions of the American definitions.
Additional spending was agreed early in the day by the leaders of the Democratic Party and the ruling power party, which exceeds the government’s original proposal of 12.2 trillion Won.
The revised package includes 200 billion WNA aids to obtain discounts on fresh products and areas affected by the wildfire, 400 billion winners against regional vouchers, and 800 billion WNDs for infrastructure.
The fourth largest economy in Asia recorded an unexpected shrinkage in the first quarter, according to the data issued last week. The stagnant and consumption exports, which are doubled by the uncertainty about the aggressive trade measures of Washington, have sparked the expectations of further cuts in interest rates by the Bank of Korea.
The construction investment witnessed a sharp decrease, as it decreased 3.2 % during the quarter.
When the veil was first unveiled a smaller proposal of 12.2 trillion Won earlier this month, the government left the door open for modification, admitting that the timing of motivation was very important, despite the conditions of the narrow bond market.
The Democratic Party, which carries a parliamentary majority, initially prompted a much larger package-connecting to 35 trillion Won-, including criticism-like payments aimed at stimulating local consumption.
Economists suggest that another supplementary budget can be on the table later this year, depending on the results of the sudden presidential elections to be held on June 3.
Korea recently indicated that it may review its economic expectations by 1.5 % at the next policy meeting in May. Separately, the International Monetary Fund reduced its growth forecast for 2025 for South Korea from 2 % to 1 %.
