The presidential office on Friday sent conflicting signals about a potential shift in President Yoon Suk-yeol’s signature fiscal conservatism, with one senior official telling Yonhap News Agency that the administration was open to a supplementary budget to address growing economic polarization. However, hours after the news broke, another presidential official contradicted this position, stating that no supplementary budget was currently under consideration.

The ruling People Power Party (PPP) further complicated matters by stating it had not been consulted about any supplementary budget plans, highlighting apparent coordination gaps between the party and the presidential office. This is also a particularly sensitive issue timing-wise, as the 2025 budget review is still ongoing at the National Assembly. If confirmed, the consideration of a supplementary budget would represent a significant departure from Yoon’s earlier stance, which strongly criticized the previous progressive administration’s frequent use of supplementary budgets as excessive intervention.

WHY IT MATTERS

The mixed messaging reflects a crucial strategic shift as Yoon enters the second half of his presidency with record low approval ratings. The potential pivot appears driven by multiple pressures: PPP leader Han Dong-hoon’s likely requests for more voter-friendly policies ahead of the next presidential election, mounting social challenges including income inequality, educational disparities and housing costs and the need to differentiate his latter term from his first half. The shift suggests Yoon’s team recognizes that strict fiscal conservatism may be untenable given these mounting social and political pressures.

This comes as both conservative and progressive camps last week started shifting from their traditional positions. While Yoon’s administration signals openness to greater spending and intervention to address inequality, opposition leader Lee Jae-myung is moving rightward with pro-business positions like supporting financial investment tax elimination and measures such as easing corporate criminal liability for breach of trust and separate taxation on dividends.

For Yoon, the policy shift could help salvage his presidency’s second half but risks alienating his conservative base, while Lee’s pro-business pivot aims to broaden his appeal beyond traditional progressive supporters — if he can overcome his ongoing legal challenges, as a party leader that faces yet another verdict on Monday afternoon.