25 trillion won ‘war budget’ must be carefully assessed

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25 trillion won ‘war budget’ must be carefully assessed

Published: 24 Mar. 2026, 00:00

Audio report: written by reporters, read by AI

Park Hong-keun, nominee for minister of planning and budget, adjusts his glasses during a confirmation hearing at the National Assembly in Yeouido, Seoul, on March 23. [NEWS1]

The Democratic Party and the government agreed two days ago on a supplementary budget worth 25 trillion won ($16.7 billion) to respond to the Middle East crisis. The plan aims to ease the burden of high oil prices on logistics and fuel costs, support vulnerable households, small business owners, farmers and fishermen, and assist export companies affected by the situation. Following President Lee Jae Myung’s recent remarks on income support, the package is also expected to include cash assistance through local-currency programs.

Given the strain on livelihoods caused by high oil prices and a weak currency, a supplementary budget has an element of inevitability. In times of crisis, such budgets should be both swift and sufficient. However, the agreed scale of 25 trillion won exceeds earlier estimates by 5 trillion to 10 trillion won, raising questions about whether the size and composition have been properly assessed.

Democratic Party leader Jung Chung-rae said the government would not miss the “golden time” for the budget and pledged to pass it in the National Assembly by the 10th of next month at what he described as the fastest pace in history. Labeling it a “war budget” should not be used to exclude reasonable debate and criticism. Although the opposition has struggled to fulfill its role, pushing the budget through unilaterally would risk appearing dismissive of the democratic process.

Park Hong-keun, nominee for minister of planning and budget, said during a parliamentary confirmation hearing that the budget would proceed without issuing additional government bonds. However, the expected surplus tax revenue should not be treated as free funds. If implemented, the supplementary budget would increase this year’s total budget from 728 trillion won to 753 trillion won, already 8.1 percent higher than last year’s original budget. This would represent an increase of nearly 80 trillion won, or 11.8 percent, compared to last year.

For an economy with a potential growth rate in the 1 percent range, such rapid fiscal expansion is not typical. The government has already planned a deficit exceeding 100 trillion won for this year. Rather than spending anticipated surplus revenue immediately, it would be more responsible to use it to reduce deficit-financed debt where possible.

Rising inflation expectations and uncertainty from the Middle East conflict have already pushed up government bond yields. Without clear fiscal discipline to limit the supplementary budget to what is necessary, yields could rise further. Higher market interest rates would place additional strain on small business owners and vulnerable groups already burdened by debt. The government and ruling party should proceed with greater caution.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.