South Korea’s Leader Pushes for $22.5 Billion Budget to Address Economic Challenges

South Korea’s President, Lee Jae-myung, urged the National Assembly on June 25 to approve a 30 trillion won ($22.5 billion) supplementary budget to tackle economic slowdown and rising unemployment. 

The proposal, submitted on June 20, allocates 15 trillion won for 500,000 new jobs, 5 trillion won for small and medium enterprises, and 3 trillion won for infrastructure.

South Korea’s economy grew 2.3% in Q1 2025, down from 3% in 2024, with unemployment at 4.2%. Han cited global trade tensions, including U.S. tariffs on semiconductors, which account for 20% of exports, as threats to the $1.7 trillion GDP. The budget includes 5 trillion won for chip R&D to counter China’s 10% export growth. Opposition leaders criticized the 3 trillion won military allocation, advocating for more social welfare.

With a July 5 deadline, the Assembly, split 170-130 between Democrats and the People Power Party, risks delays that could trigger credit rating downgrades. The budget is crucial for meeting Korea’s 2.5% growth target for 2025, sustaining its position as Asia’s fourth-largest economy.