South Korea acting president calls for agreement on extra budget amid slowing economy

By Jihoon Lee

SEOUL (Reuters) - South Korea's acting President Choi Sang-mok on Wednesday said he hoped for a swift agreement within the country's parliament on an extra budget to support an economy struggling with slowing domestic demand and heightened external uncertainty.

"I hope that parliament reaches an agreement on the basic principles regarding the supplementary budget as soon as possible," said Choi, the country's finance minister who is serving as acting president.

On Tuesday, the floor leader of the ruling People Power Party, Kweon Seong-dong, said that the party was not opposed to discussing an extra budget. His comment came a day after the leader of the opposition Democratic Party proposed an extra budget of at least 30 trillion won ($20.65 billion).

Asia's fourth-largest economy barely grew in the fourth quarter of 2024, as the country's worst political crisis in decades hurt already weakened domestic demand and threatened to further sap growth in a year of rising external risks under the second Donald Trump presidency.

There have been growing calls among economists and even from the central bank governor that the government draft a supplementary budget to support the economy. South Korea's economic growth is expected to slow to 1.6% or 1.7% this year, from 2.0% last year, according to the Bank of Korea.

Choi also said the government would respond preemptively to any domestic impact from U.S. tariffs by preparing support measures for domestic firms and seeking to diversify export markets.

The government will strengthen support for the biopharmaceutical sector and assist domestic firms to connect with manufacturing facilities in the United States, Choi said, after U.S. President Trump said the sector was also under consideration for tariffs.

($1 = 1,452.5800 won)

(Reporting by Jihoon Lee; Editing by Ed Davies)