South Korea's Fiscal Boost: Addressing Economic Challenges

South Korea is set to implement a second supplementary budget to bolster an economy facing U.S. tariff pressures and reduced consumer demand. President Lee Jae-myung prioritizes expansionary fiscal policies, including measures against rising food and oil prices, to stimulate economic growth and stabilize inflation.

In response to economic pressures, South Korea's government announced a second supplementary budget for the year. Aimed at bolstering a flagging economy hit by U.S. tariffs and weak consumer demand, the new fiscal plan will focus on aiding those struggling with rising prices.

President Lee Jae-myung, in office since June 4, is pushing for expansionary fiscal policies. Specific measures include spending to alleviate rising food prices and extending tax breaks on oil products. These steps coincide with the Bank of Korea's revised economic growth forecast of 0.8%, a substantial cut from earlier predictions.

Additionally, tax cuts on car purchases will continue through year-end to support the auto industry. Inflationary pressures eased slightly in May, with consumer inflation at a five-month low of 1.9%, below the central bank's target. However, prices for processed foods and dining services continue to climb, prompting targeted fiscal interventions.

(With inputs from agencies.)