Seoul deploys cash support, price controls and industrial measures as Middle East disruption strains economy

South Korea approved a $17 billion (26.2 trillion won) supplementary budget on Tuesday aimed at mitigating the domestic impact of prolonged disruption in global energy markets linked to the Middle East conflict, as authorities move to stabilize prices, support households and shield key industries. The package, approved at a Cabinet meeting chaired by President Lee Jae Myung, focuses on easing fuel cost burdens, supporting vulnerable groups and limiting damage to supply chains as volatility in oil and gas flows persists.

Measures include cash transfers to lower-income households, expanded fuel tax cuts and continued price controls on petroleum products, alongside targeted support for industries exposed to higher input costs and supply disruptions. The government said the budget will be funded through “higher-than-expected” tax revenue and existing funds without issuing additional government bonds, and includes partial debt repayment to limit the impact on financial markets. The proposal was submitted to the National Assembly on the same day.

South Korea approved a $17 billion (26.2 trillion won) supplementary budget on Tuesday aimed at mitigating the domestic impact of prolonged disruption in global energy markets linked to the Middle East conflict, as authorities move to stabilize prices, support households and shield key industries. The package, approved at a Cabinet meeting chaired by President Lee Jae Myung, focuses on easing fuel cost burdens, supporting vulnerable groups and limiting damage to supply chains as volatility in oil and gas flows persists.

Measures include cash transfers to lower-income households, expanded fuel tax cuts and continued price controls on petroleum products, alongside targeted support for industries exposed to higher input costs and supply disruptions. The government said the budget will be funded through “higher-than-expected” tax revenue and existing funds without issuing additional government bonds, and includes partial debt repayment to limit the impact on financial markets. The proposal was submitted to the National Assembly on the same day.

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