South Korea Proposes $17.3 Billion Budget for War Relief

South Korea has proposed a supplementary government budget of $17.3 billion to support consumers and companies hit by the escalating conflict in the Middle East. The surge in oil prices sparked by the war involving the United States, Israel, and Iran has raised growth and inflation risks for Asia’s fourth-largest economy. As the world’s fourth-largest importer of oil, South Korea relies on the Middle East for 70% of its purchases, making it highly susceptible to regional shocks.

This fiscal measure is the second extra budget introduced in less than a year under the administration of President Lee Jae Myung, who has pursued an expansionary fiscal policy to spur economic growth since taking office last June. Market participants and firms like Korean Reinsurance Company are monitoring the situation as the government works to stabilize the economy against external pressures.