The South Korean government is set to submit a 10 trillion won ($6.8 billion) supplementary budget to parliament, aiming to mitigate the economic impact of the country’s worst-ever forest fires and counter sluggish growth, Finance Minister Choi Sang-mok announced on Sunday.
Speaking at an emergency policy meeting, Choi revealed that the devastating wildfires have ravaged 48,000 hectares (120,000 acres) of land, resulted in 75 casualties, and caused extensive property damage. “We plan to draw up an emergency supplementary budget worth 10 trillion won, which we can swiftly execute,” Choi said, urging lawmakers to approve the package before the end of April.
The country is facing additional economic pressures as the U.S. government, under President Donald Trump, is expected to impose new tariffs targeting key South Korean industries, including semiconductors, pharmaceuticals, and automobiles. The anticipated trade restrictions pose a significant challenge for the export-driven economy, further amplifying concerns over economic growth.
In response to mounting economic uncertainty, the Bank of Korea recently cut its benchmark interest rate by 25 basis points to 2.75%, signaling a shift from restrictive monetary policy to a more neutral stance aimed at boosting growth. The central bank also slashed its 2025 economic growth forecast from 1.9% to 1.5%, following weak performance in the fourth quarter, when GDP expanded by just 0.1%.
As the government moves to address both disaster recovery and economic headwinds, the proposed emergency budget is expected to play a crucial role in stabilizing South Korea’s economy amid growing domestic and international challenges.
