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Analysis South Korea’s 2025 budget ignores trade and debt risks at its perilWith most funds deployed in early 2025, the government may lack flexibility to respond to worsening economic conditions South Korea’s 2025 budget overview is already obsolete, failing to account for looming corporate debt risks, political instability and inevitable supplementary budgets. The $467.4 billion (673.3 trillion won) budget, passed in December without input from the ruling People Power Party (PPP) after President Yoon Suk-yeol’s failed martial law declaration, prioritizes front-loaded spending to counter economic uncertainty. However, it overlooks critical challenges — rising corporate bond maturities, Donald Trump’s trade policies, supply chain disruptions and global market volatility. With Bank of Korea (BOK) Governor Rhee Chang-yong already calling for an additional stimulusbetween $10.3 billion and $13.8 billion (15 to 20 © Korea Risk Group. All rights reserved. |





