(LEAD) Budget minister vows efforts to devise comprehensive strategy to overcome structural challenges

▲ Budget Minister Park Hong-geun speaks to reporters in his first press conference held at the government complex in Sejong on April 21, 2026, in this photo provided by his office. (PHOTO NOT FOR SALE) (Yonhap)

▲ A gas station in Seoul on April 15, 2026 (Yonhap)

(LEAD) budget minister-press conference

(LEAD) Budget minister vows efforts to devise comprehensive strategy to overcome structural challenges

(ATTN: ADDS info in last 6 paras, 2nd photo)

SEOUL, April 21 (Yonhap) -- The budget ministry will work to devise a comprehensive strategy to overcome structural challenges facing South Korea, including artificial intelligence (AI) transformation and demographic changes, Minister Park Hong-keun said Tuesday.

The policymaker made the remarks in his first press conference since becoming the inaugural head of the newly established Ministry of Planning and Budget.

The administration of President Lee Jae Myung newly created the budget ministry in a bid to better push for fiscal reforms aimed at promoting long-term sustainability in South Korea's finances.

The ministry is working to develop short-term and long-term measures to tackle five major structural challenges that the country needs to tackle. These are AI transformation, demographic changes, polarization, carbon neutrality and rural depopulation.

The ministry is also working to boost the efficiency of state budget execution with an aim to "boldly" reduce unnecessary budget and focus more resources into key national projects, Park stressed.

In particular, the ministry is "swiftly" administrating the 26.2 trillion-won (US$17.8 billion) extra budget recently approved by the National Assembly in an effort to mitigate the economic fallout from the ongoing Middle East conflict, he said.

The supplementary budget includes the government's plan to distribute cash assistance to the bottom 70 percent of income earners to help ease the burden from rising oil prices, and financial assistance for export companies facing difficulties due to the ongoing crisis in the Middle East.

For now, it is too early to say whether another supplementary budget will be sought, the minister also said, citing experts' projections of continuing supply chain disruptions.

"No one can tell (for now) whether there will be a second supplementary budget," he said.

Regarding the possibility of this year's financial assistance programs being extended into next year to offset the impact of elevated oil prices, the budget minister said no measures are currently under consideration.

"The latest supplementary budget will be sufficient to cushion the impact of higher oil prices through the end of this year," he said. "If tensions in the Middle East persist into 2027, the government may consider an additional budget to address the situation."

The government introduced a fuel price cap system on March 13, roughly two weeks after the United States and Israel launched airstrikes on Iran, in an effort to cushion rising fuel costs.

Referring to a forecast by the International Monetary Fund (IMF) that South Korea's sovereign debt-to-GDP ratio may reach 63.1 percent by 2031, the minister said such projections can be overstated, but still emphasized the need to maintain a sound fiscal cycle.

He noted that the debt-to-gross domestic product ratio is influenced by broader economic conditions, fiscal health and policy responsiveness. The IMF had projected in 2021, during the COVID-19 pandemic, that the ratio would reach 61.5 percent in 2024, but the actual figure came in lower at 49.7 percent.

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