The National Assembly approves the 11.7 trillion won extra budget bill on March 17. (Yonhap)
Speculation is growing here that South Korea will compile an additional supplementary budget after the April general elections to deal with the extended economic fallout from the COVID-19 pandemic.
Last Tuesday, the National Assembly approved an extra budget bill worth 11.7 trillion won ($9.4 billion), the country’s largest ever, in response to the coronavirus crisis.
While the total amount of the budget remained unchanged from the government’s initial suggestion, some planned expenditures unrelated to COVID-19 were cut to increase funds for the southeastern city of Daegu and neighboring North Gyeongsang Province.
The ruling Democratic Party of Korea had made attempts to scale up the budget by some 6 trillion won but compromised in the face of potential opposition backlash and a tight parliamentary schedule. Instead, it underlined that further budget planning will be required to respond to the current economic situation.
“The need of another extra budget is continuously on the rise,” Rep. Cho Jeong-sik, chief policymaker for the ruling Democratic Party of Korea, said in a party meeting last week.
“As the global economic situations are aggravating, we are looking ahead to an additional (budget) situation.”
But in light of the election campaign timeline, the related discussions are likely to be shelved until after the 21st parliamentary elections slated for April 15, the lawmaker added.
President Moon Jae-in himself has alluded to this, pointing to the extensive fallout from COVID-19.
“(This) extra budget bill is only the beginning,” he said last week, just before the parliament approved it.
“It is possible that the COVID-19 solutions will require more than a single extra budget. We may need secondary, tertiary actions, should these circumstances prolong.”
A convincing timeline for the upcoming budget discussions is May, shortly after the April elections and prior to the kickoff of the 21st National Assembly. Also, the government is expected to be ready for an intermediary fiscal check-up as it earlier vowed to execute 75 percent of the recent extra budget by May.
By Bae Hyun-jung (firstname.lastname@example.org)