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President Lee Jae-myung presides over the "Presidential Order No. 1: Emergency Economic Task Force meeting" at the presidential office in Yongsan, Seoul, on June 4. / Source: Yonhap News

South Korea’s new government is moving quickly to draft a second supplementary budget (extra budget), aiming to revive domestic demand and lift the country’s projected near-zero economic growth. The government and ruling Democratic Party are reportedly considering a package exceeding 20 trillion won, with a major portion expected to fund a universal 250,000-won per-person relief payment to support livelihoods.

According to the Ministry of Economy and Finance on June 8, the government is working to submit the extra budget bill to the National Assembly as early as the following day. The initiative follows President Lee Jae-myung’s call during his first emergency economic task force meeting on June 4 for bold measures to stimulate the economy and support citizens.

The second extra budget is expected to surpass 20 trillion won. Democratic Party Policy Committee Chair Jin Sung-joon recently noted in an interview, “At the beginning of the year, our party estimated that a 35 trillion-won supplementary budget was needed. Subtracting the 14 trillion won from the first extra budget, about 20 to 21 trillion won remains necessary.”

The upcoming budget will prioritize boosting domestic consumption. One key component is regional currency (local vouchers) issuance. “The first extra budget didn’t allocate enough support for restoring domestic demand and consumer spending,” Jin said. “This will definitely be included in the second extra budget.” During the presidential campaign, the Democratic Party proposed a 34.7 trillion-won supplementary budget plan, with 12.8 trillion won earmarked for regional currency support—potentially meaning that nearly half of the second extra budget could go toward this effort.

Part of the budget will also likely address debt relief for small business owners and self-employed workers hit by COVID-19. Many still carry debt from government-backed loans provided to offset losses during mandatory shutdowns, and the new administration sees further support as necessary to ease their financial burdens.