South Korean parliament cuts budget plan, forcing president into tight spot
South Korean lawmakers passed a reduced budget for 2025 without government approval creating first-ever such case. The move follows recent martial-law drama and sets stage for economic policy shake-up
South Koreas parliament made an un-precedented move this tuesday when it trimmed the governments 2025 budget proposal by 4.1 trillion won (around $3 billion) without getting any go-ahead from the ruling party
The opposition-controlled assembly voted 183-94 to approve a 673.3 trillion won spending plan; this marks the first-time lawmakers passed a reduced budget without inter-party agreement
A swift passage of the bill will help resolve the current unease and crisis
The Democratic Party says they made cuts in these areas:
- Government reserve funds
- Interest payment costs
- Presidential office spending
- Classified operations budget
Parliament speaker Woo Won-shik pointed-out the governments lack of cooperation during talks and suggested preparing extra budget for 2025. The ruling party claims these cuts will affect basic state functions and slow-down help for small businesses
This budget drama comes just days after President Yoon Suk Yeol issued a short lived martial-law decree (which he partly explained by budget disagreements)
Economic experts say this budget reduction isnt good news: the country barely avoided recession last quarter and growth is expected to slow-down to 1.9% next year. Park Sang-hyun from iM Securities thinks its gonna create a policy gap; Citi analysts estimate it might lower growth by 0.02%
