In order to cope with the damage caused to citizens by high oil prices triggered by the Middle East war, South Korea on the 31st passed a supplementary and revised budget with a scale of 26.2 trillion won (696.08 billion ringgit), and will issue subsidies ranging from 100,000 won (265.7 ringgit) to 600,000 won (1,594.2 ringgit) per person to about 35.8 million people, or the bottom 70% by income.
According to Yonhap News Agency, South Korean President Lee Jae-myung presided over a cabinet meeting on the 31st and passed the supplementary budget, named the “2026 Supplementary Budget to Overcome the Middle East War Crisis.” The budget focuses on three main directions: responding to high oil prices, stabilizing people’s livelihoods, reducing industrial losses, and stabilizing the supply chain.
With a sharp rise in international oil prices, the South Korean economy is facing the “triple-high shock” of high prices, high interest rates, and high exchange rates. To address the damage caused to the average citizen by high oil prices, the government decided to issue subsidies ranging from 100,000 to 600,000 won per person to about 35.8 million people, or the bottom 70% by income.
The total scale of this subsidy is 4.8 trillion won (12.752 billion ringgit), about 40% of last year’s supplementary budget item “Consumption Vouchers for Livelihood Recovery” (12.1709 trillion won) (32.335 billion ringgit), and will be issued in cash. The South Korean government estimates that this supplementary budget could boost the economic growth rate by 0.2%.
New Planning and Budget Director Park Hong-geun said: “High oil prices and inflation bring a greater burden to individual businesses, youth, and other vulnerable groups. In order to prevent the hard-won economic recovery from dying out, we determined it necessary to quickly provide fiscal support and drafted this supplementary budget.”
Park Hong-geun also pointed out that with the rising tensions in the Middle East, internal and external uncertainties are rapidly increasing and a huge wave of crisis is quickly approaching the South Korean economy. “Before this wave of impact affects the people and the economy, we must quickly build a solid breakwater in the form of this supplementary budget.”