The South Korean Parliament has approved an additional fiscal stimulus plan exceeding 200 billion US dollars.

The South Korean National Assembly has approved more than $20 billion in additional fiscal stimulus for the new government led by President Lee Jae-myung to support the weak economy. It is widely believed that the fourth largest economy in Asia is losing momentum, with the Bank of Korea predicting that the GDP growth rate will slow from 2.0% in 2024 to 0.8% this year. The left-leaning government of Lee Jae-myung, who took office on June 4th, plans to use most of the additional fiscal spending to distribute cash or gift certificates to citizens to stimulate private consumption, provide assistance to financially distressed households or small businesses, and invest in artificial intelligence infrastructure in South Korea. The Ministry of Finance of South Korea stated in a statement that the total amount of the stimulus package approved by the National Assembly last Friday evening is 31.8 trillion won, equivalent to $23.2 billion, exceeding the government's initial proposed 30.5 trillion won. The package requires a net increase of 16.2 trillion won in national budget expenditures, exceeding expectations. This net increase is also in addition to the 13.8 trillion won in additional budget beyond the regular 2025 budget of 673.3 trillion won from the previous government. With an expected tax revenue shortfall this year, the Ministry of Finance plans to issue new debt to fund the stimulus package. After the additional budget spending, the government's fiscal deficit and national debt are expected to reach 4.2% and 49.1% of GDP, respectively.