As the government submitted a 26 trillion won supplementary budget bill to the National Assembly to respond to the Middle East war, Cheong Wa Dae said about the possibility of increasing the amount, "If we expand the budget further, we may have to take on debt." The ruling Democratic Party of Korea has signaled increases in five areas, including "closing support blind spots caused by high oil prices," during the budget review, but the presidential office said it would try to maintain the government's original plan as much as possible in light of tax revenue conditions.
Presidential Chief of Staff Kang Hoon-sik said at a press briefing on Apr. 7, "In this supplementary budget, about 1 trillion won is set aside to repay Government Bonds," adding, "If we increase it further, we may have to take on debt, so we are wary of expanding it." He added, "If possible, we would like opinions from both the ruling and opposition parties to be reflected so that an agreement can be reached within this plan."
Cheong Wa Dae and the government are emphasizing that this supplementary budget is a "debt-free supplementary budget." Without issuing Government Bonds, the core of the plan is to respond to the Middle East situation by using excess tax revenue stemming from a boom in the semiconductor cycle and a buoyant stock market. The supplementary budget bill the government submitted to the National Assembly totals 26.2 trillion won, combining ▲ 25.2 trillion won in excess tax revenue and ▲ 1 trillion won for Government Bonds repayment.
On overall market conditions after the supplementary budget, including inflation, the office said, "(Rising prices are) to some extent inevitable." In fact, consumer prices in March rose at a faster pace of 2.2% from the previous month's 2.0% due to a surge in petroleum prices. The market consensus is that April's increase will be in the high 2% range.
Policy Chief Kim Yong-beom said, "Given the shares of crude prices and chemical products, we naturally expected prices to rise," adding, "We will work to curb the increase through measures such as a price ceiling and other tools." On concerns that it could affect real estate prices, Kim said, "There have been multiple instructions from the president to mobilize all policy tools so that the hard-won stability in real estate does not become shaky again," adding, "Inflation came in high, but we will do our best to ensure stability."
On the possibility, raised by some in politics, of a second supplementary budget, the office said it was "far ahead of the curve." Although senior government officials such as Minister of Planning and Budget Park Hong-geun and Senior Secretary for Political Affairs Hong Ik-pyo at Cheong Wa Dae suggested in media interviews that a second supplementary budget was possible, Kim said, "That is a very principled position," adding, "For now, the priority is swift deliberation, confirmation, and execution of the first supplementary budget."
He added that the supplementary budget submitted to the National Assembly was drawn up on the assumption that a U.S.-Iran war would directly impact the Korean economy for three months and indirectly for six months, saying, "What happens after that is a matter to consider after faithfully executing this supplementary budget."