South Korea Unveils $17.3 Billion Stimulus to Counter West Asia Shock, Boost Demand

• South Korea proposes a $17.3 billion (26.2 trillion won) supplementary budget to mitigate the economic impact of escalating conflict in West Asia.
• The stimulus aims to cushion households and businesses from rising energy costs due to the US-Israel conflict with Iran, impacting crude prices.
• Key components include 10.1 trillion won for high oil prices, a 4.8 trillion won consumer voucher program, and support for low-income households and businesses.
• The government will finance the budget through excess tax revenues from semiconductor exports and a strong stock market, avoiding new debt.
• The additional spending is estimated to boost economic growth by 0.2 percentage points this year, with the fiscal deficit projected to narrow.