South Korea plans $17.3bn war relief budget

South Korea is preparing a massive $17.3 billion emergency budget to shield its economy from the growing fallout of the conflict involving Iran, as energy concerns and market volatility intensify.

President Lee Jae Myung has called for “bold measures” to address the economic risks triggered by the ongoing war, particularly the threat to energy supplies. The proposed stimulus package aims to support both households and businesses facing rising costs and uncertainty, News.Az reports, citing Al Jazeera.

This marks the second supplementary budget introduced in less than a year under Lee’s administration, highlighting a clear shift toward aggressive fiscal expansion since he took office last June.

South Korea remains especially vulnerable to geopolitical shocks, importing around 70% of its oil from the Middle East. Any disruption linked to the conflict could significantly impact fuel prices, inflation, and overall economic stability.

Investor sentiment has already taken a hit. Over the past month, South Korea’s main stock index, the KOSPI, has plunged more than 11%.

The sell-off continued on Tuesday, with the index dropping another 2.71%, losing 143 points to stand at 5,134.16 as of 04:00 GMT.

The government’s latest move underscores growing concern that the conflict could have long-lasting economic consequences, particularly if energy supply disruptions worsen.

With markets under pressure and no clear resolution to the conflict in sight, South Korea is moving quickly to stabilize its economy and prevent further financial strain on businesses and consumers.

News.Az 

By Aysel Mammadzada