June 27, 2025
SEOUL – President Lee Jae Myung on Thursday called for “fair growth” as a way to address persistent recession fears and growing economic inequality, urging the opposition to support his administration’s proposed 30.5 trillion won ($22.4 billion) extra budget.
In his first parliamentary address since taking office through an early election three weeks ago, the liberal president said the budget centers on universal cash handouts to all 52 million South Koreans — a move he framed as a crucial step toward bridging the socio-economic divide.
Of the 30.5 trillion won, the government proposes doling out 13 trillion won worth of universal cash grants. These would amount to between 150,000 won and 520,000 won, depending on an individual’s income level and living conditions.
Lee also suggested an additional budget of 3.9 trillion won to stimulate investment in infrastructure, construction, artificial intelligence, renewable energy and startups. Also, 5 trillion won will be spent on debt write-offs for some 1.1 million people unable to repay their debts, and on measures for job security.
“If the economic slowdown persists, the window of opportunity is closing, while competition and conflict will intensify, which is a vicious cycle,” Lee told lawmakers in his address.
“We should create a new driver for growth and open the door to fair growth to share the opportunities of growth and the fruits of it.”
The liberal president cited a triple whammy of the rising cost of living, high borrowing costs and the weakened local currency, which led to an economic downturn in recent quarters. Lee also said such economic headwinds are coupled with sluggish consumption, dwindling investment and surging loan delinquencies.
Former President Yoon Suk Yeol’s brief imposition of martial law, Washington’s tariff threats and instability in the Middle East added to the economic crisis, he added.
In an apparent reference to the conservative main opposition People Power Party, which has denounced the recent extra budget proposal as “the start of populism,” Lee said the government cannot neglect the reality faced by the people.
“Fiscal austerity at a time of economic crisis would be irresponsible and would go against the purpose of the government,” Lee said. “The biggest responsibility of the government is to protect people’s livelihoods, isn’t it?”
Lee asked the conservative opposition People Power Party to express its opinions in the process of reviewing the budget bill.
“The ruling and the opposition parties should work hand in hand in the economic revival and preservation of people’s livelihoods. The extra budget proposal will bring water to end the drought and is the least we can do to achieve an economic recovery,” he added.
The National Assembly, in which the ruling Democratic Party of Korea holds 167 out of 298 seats, is looking to pass the supplementary budget bill no later than July 4. Some National Assembly committees already started reviewing the bill on Wednesday.
The plan, however, has triggered criticism from the main opposition that the budget spending will only contribute to the growth of government debt and is not the optimal way to boost the economy.
The conservative party, when former President Yoon was in power, had long pursued moderation in government spending amid a ballooning national debt. South Korea’s national debt stood at 1,175.2 trillion won in 2024, up 4.3 percent year-on-year, and the debt-to-GDP ratio came to 46.1 percent, down 0.8 percentage point from the previous year.
During his 17-minute speech to the National Assembly, Lee also said his foreign policy will not be influenced by ideology, signaling continuity despite the power transition that followed the liberal president’s victory.
Instead, he said he would gauge diplomatic moves on whether they serve the national interest.
“There are no colors (representing specific ideologies) when it comes to diplomacy,” Lee said. “Any decision (in South Korean diplomacy) should be based on whether it serves the national interest or not, rather than whether we have a liberal or a conservative (administration).”
While stressing “wise” actions to address uncertainties about US tariff policy, Lee said his commitment to peace on the Korean Peninsula will remain steadfast because he believes that achieving peace will contribute to South Korea’s economic growth.
“Peace will feed you, and peace equals economic (strength),” Lee said. “Peace will spur economic growth, and economic strength will again invigorate peace, and the virtuous cycle will allow South Korean people to enjoy daily lives without disturbance.”
Restoring fairness in South Korean society will also be important, Lee said, adding it is not something he can achieve alone.
“Achieving a fair society in which those who violate the rules cannot gain advantage and those who abide by the rules cannot be disadvantaged would be impossible without the cooperation of everyone,” Lee said.
As Lee entered the National Assembly plenary chamber, People Power Party lawmakers stood up as a sign of respect. When the president said there was “no left and right when it comes to diplomacy,” there was applause from the opposition aisle of the chamber.
As Lee left the chamber, People Power Party lawmakers offered to shake hands with the president and asked him to retract the nomination of Rep. Kim Min-seok as prime minister.
Over the two days of his confirmation hearing on Tuesday and Wednesday, Kim faced scrutiny over allegations surrounding how he accumulated a significant portion of his wealth, which isn’t reflected in his tax returns.
Kim was also slammed over his so-called “anti-US” past activities, to which he defended his breaking into the US Cultural Center near the US Embassy in Seoul in 1985 as a college student. Kim said it marked the first instance of an attempt to raise the alarm about possible US involvement in the South Korean government’s violent response to a series of rallies in 1980 against then-President Chun Doo-hwan.
According to Rep. Kim Yong-tae, the People Power Party’s leader, Lee did not respond to his calls asking the president to reconsider Kim as prime minister.