▲ President Lee Jae Myung (C, bottom) delivers a budget speech at the National Assembly in Seoul on April 2, 2026. (Yonhap)

(LEAD) Lee-budget speech

(LEAD) Lee asks for swift passage of extra budget to cope with economic fallout from Mideast war

(ATTN: ADDS more details from fourth para, photo)

By Kim Eun-jung

SEOUL, April 2 (Yonhap) -- President Lee Jae Myung on Thursday asked the National Assembly to swiftly pass a supplementary budget to cope with the economic fallout from the war in the Middle East, stressing that extraordinary measures are needed to address the crisis.

In a budget speech to the National Assembly, Lee outlined the 26.2 trillion-won (US$17.1 billion) extra budget, describing the situation as an "unexpected, multifaceted" crisis as the U.S. war on Iran enters its second month.

"Extraordinary measures are needed in times of emergency," Lee said. "The government recognizes the current situation as a wartime-level crisis for the people's economy and is mobilizing all available resources to overcome it."

Lee said disruptions in oil supply have driven up gasoline and diesel prices, while shortages of key raw materials, such as naphtha and urea, are threatening a wide range of sectors, including plastic products and fertilizer production.

Global oil prices have risen sharply as the Strait of Hormuz has effectively been closed since U.S.-Israeli strikes on Iran in late February, disrupting global oil supplies. South Korea relies heavily on imports for energy.

"The situation may not be resolved in the short term, making a more thorough and proactive response all the more necessary," he said.

Lee said the extra budget was arranged to provide stronger support for the socially vulnerable in times of crisis and to avoid missing the golden window for economic recovery.

A key component of the proposal is 4.8 trillion won in cash handouts for the bottom 70 percent of income earners.

Under the scheme, about 35.8 million people will receive between 100,000 won and 600,000 won per person, with payments differentiated by income level, region and whether recipients live in areas facing population decline.

More than 10 trillion won will be allocated to mitigate the impact of high oil prices. Another 5.1 trillion won will support a fuel price cap program and measures to address potential supply disruptions of naphtha, a key petrochemical feedstock.

Under the price cap system introduced in March, the government sets maximum prices for fuel products supplied by refiners to gas stations and distributors every two weeks, reflecting changes in global oil prices.

To build a more resilient supply chain, he pledged to secure naphtha supplies and expand support for petroleum stockpiling, while establishing a fair oil distribution system through improved price transparency and stronger oversight of illegal activities.

"It is designed to make bold investments where needed in the wake of the Middle East crisis, while ensuring the burden is not passed on to the public or the broader economy," he said.

He emphasized that the budget would be implemented without issuing government bonds, using 25.2 trillion won in additional tax revenues generated by strong stock market performance and the semiconductor sector.

The ruling Democratic Party and main opposition People Power Party have agreed to pass the budget bill by April 10.

(END)

[ⓒ K-VIBE. 무단전재-재배포 금지]