Source: Government of the Republic of Korea
Fellow Koreans, the Honorable Speaker Woo Won-shik and distinguished members of the National Assembly,
I stand here with a profound sense of urgency, determined to safeguard our economy and the lives of our people from the grave crisis caused by the war in the Middle East.
It has been thirty-four days since the war broke out.
Widely seen as the worst energy security threat in history, this crisis has delivered a shock to the global economy. Uncertainty over when it will end has made the economic repercussions even worse.
With the global economy faltering, I am concerned that the flame of economic growth that we have worked so hard to rekindle may flicker out.
After our benchmark KOSPI index surpassed 5,000 points, our economy was poised for renewed growth thanks to the strong performance of our globally competitive businesses, including in the semiconductor and shipbuilding sectors. However, due to the war in the Middle East, we are facing an unexpected polycrisis.
Oil supply disruptions have driven sharp increases in gasoline and diesel prices. Shortages of such raw materials as naphtha and urea are posing a threat to a wide range of people’s livelihoods, including the production of plastic bags and other plastic products as well as fertilizers.
Above all, we must steel ourselves for stronger, more thorough responses since this situation may not end soon.
A state of emergency requires extraordinary measures, indeed.
Aware that this grave situation is nothing less than a state of war for the people’s livelihoods and the economy, my administration is doing everything possible to overcome the challenges we face.
We have put the entire government, including Cheong Wa Dae, on an emergency economic response system. We are fully preparing for all possible scenarios by conducting rigorous analyses of external risks.
For the first time in twenty-nine years, we have swiftly adopted an oil price cap system. We have been also ramping up our monitoring of supply and demand for naphtha and urea while implementing a broad range of measures to ease the burden on ordinary citizens and minimize economic shocks, including through government-backed financing support for affected businesses.
We are also making every effort to diversify our oil supply sources, including by working with the UAE to secure twenty-four million barrels of crude oil.
Looking back at past crises, the longer it took us to promptly respond to unforeseen external shocks, the more exponential the damage was to our economy and people.
Drawing on the lessons we have learned, we will respond proactively – with even worst-case scenarios in mind – by carefully examining the potential impact on the overall economy and people’s daily lives.
In this connection, I would like to personally explain to the people the reasons and key points of the government’s 2026 supplementary budget proposal – prepared with great urgency – and seek the National Assembly’s swift cooperation.
The government’s inherent responsibility is to direct taxpayer funds where most needed, in a timely manner.
Guided by the principle that the socially vulnerable require stronger protection in trying times and firmly resolved to seize the window of opportunity for economic recovery, we have prepared a supplementary budget proposal totaling 26.2 trillion won.
This budget is designed to channel bold investments where most needed in response to the crisis triggered by the Middle East war, while ensuring that the burden is not passed on to our people and the economy.
In particular, I would like to make it clear that this is a debt-free supplementary budget and will not require the issuance of government bonds. It is thanks to the help of all of you here, members of the National Assembly, that the economic situation has been gradually improving.
It will be financed through 25.2 trillion won in surplus tax revenue generated by booms in the stock market and semiconductor sector, along with 1 trillion won from internal fund resources.
Allow me now to outline the details of this supplementary budget proposal.
First, we will invest over 10 trillion won in a tripartite package to ease the hardships and burdens caused by high oil prices for the public.
We have allocated 5 trillion won in specific reserve funds to ensure the smooth operation of the current oil price cap system and to respond to fluctuations in exchange rates and fuel costs.
We will introduce a new “energy cost relief payment” to give citizens breathing room as they struggle under the twin burdens of high energy costs and inflation.
Approximately thirty-six million people – those in the lower seventy percent income bracket – will each receive at least 100,000 won and up to 600,000 won, contingent on income level, with additional consideration given to residents of less-central areas.
The payment will be provided as local currency vouchers aimed at supporting local small business owners and the self-employed, and helping economic revitalization.
We will also bolster energy welfare support for low-income households and vulnerable groups including farmers and fishery workers, the ones most directly affected by high energy prices.
Among low-income beneficiaries of the energy voucher program, 200,000 households that use kerosene or LPG will receive an additional 50,000 won. We have also significantly expanded subsidies linked to oil prices, as well as support for purchases of fertilizer and feed by farmers and fishery workers.
In addition, the reimbursement rate for the nationwide public transportation subsidy program K-Pass has been hiked to help make transportation more affordable for ordinary citizens.
Second, we have put in place a 2.8 trillion won package of livelihood stabilization measures to provide strong support for those facing economic hardship.
Crises affect the vulnerable more severely. This is why it is important to provide stronger protection for those who bear the initial brunt of a crisis.
We will establish more donation-based food banks that provide free basic food and daily necessities, doubling their number from 150 to 300, to help prevent people from taking their own lives or turning to crime.
The government will provide more than 300 billion won in additional funds to small-business owners facing hardships and will offer the Hope Return Package to 8,000 additional businesses that have been forced to close, in order to help them start over.
By significantly expanding the amount of support provided for the settlement of unpaid wages and increasing employment retention subsidies, we will help workers secure stable livelihoods and ensure that any sudden employment shocks are dealt with proactively.
We will expand the rural basic income program to additional areas to significantly ease the difficulties brought about by depopulation and an aging population.
Moreover, we will give greater attention to the issue of a K-shaped economy – widening polarization across social groups, generations and industries.
In particular, this crisis is bound to hit young people at the start of their careers especially hard.
An important part of the solution will be creating more jobs by helping expand the number of entrepreneurship and employment opportunities.
We will invest 400 billion won in the “Entrepreneurship for All” project and make strong efforts to build science-centered startup cities in order to make the startup boom a nationwide phenomenon.
For young people who have left the workforce, we will launch the K-New Deal Academy – a vocational training program run in partnership with large corporations – to help them find the confidence to embrace new challenges. We will lower the threshold for the “National Employment Support Program,” offering a broader range of opportunities so that even those without prior work experience can remain hopeful and prepare for a new job.
In addition, we will launch a broader selection of discount programs for agricultural, livestock and fishery products, as well as for performances, movies and other cultural activities; holiday travel; and places of accommodation. Through these measures, we will provide support to industries expected to face hardships due to the current situation.
Third, we will spend 2.6 trillion won on minimizing the damage to our industries and stabilizing the supply chains that directly affect our economic security.
We will be able to safeguard our economy’s future only if our export companies and hard-hit industries stand resilient and successfully weather the current crisis.
We will provide them with steadfast backing by significantly increasing our logistics and financial assistance.
We will double the number of companies eligible for export vouchers, increasing the number of beneficiaries to 14,000. And we will offer an additional 7.1 trillion won in export financing and 280 billion won in low-interest funding for the tourism industry to ensure that businesses avoid a credit crunch.
After overcoming this crisis, we must establish a foothold so that our economy can make a new leap forward.
Most of all, taking this energy crisis as both a lesson and an opportunity, we will expedite the renewables-centered energy transition.
We will increase renewable energy-related loans and subsidies to a record high 1.1 trillion won in total. We will also raise the number of “sunshine income villages” substantially, from about 150 to 700. Residents of these villages participate directly in the installation and operation of solar power plants.
To improve industry fundamentals, we will introduce more artificial intelligence innovations at industrial and manufacturing sites while also boldly investing in the development of next-generation growth engines for carbon-neutral industries.
To ease the burden on the culture and arts industries, we will increase the state-backed financing for content, culture and arts industries and provide solid support for shoring up our creative foundation, which underpins K-culture.
We will also invest 700 billion won in securing a stable supply of petroleum and core strategic resources.
In addition, we will establish a robust supply chain by expanding support for building up our oil stockpiles and naphtha supply – the lifeblood of our petrochemical industry. We will also establish a fair oil distribution system by disclosing price information and thoroughly monitoring illegal activities.
Finally, we will let local governments take the initiative and play a key role in overcoming this crisis.
We will assist local governments in their efforts to surmount the crisis by providing 9.5 trillion won for local investment funds, including through local subsidies and grants.
Esteemed citizens, distinguished members of the National Assembly,
The crisis we face is not a passing shower. It is a storm whose end we cannot yet see. That is what makes the crisis so grave.
Even if the war were to end tomorrow, restoring the Middle East’s damaged energy infrastructure and returning supply to normal will take considerable time.
Because we do not know when this crisis will end, we must adopt a long-term perspective. This will help us prevail over the current crisis and prepare for the future.
Above all, we need the unified strength of our people. Now more than ever, we must be ready to share the burden and face this crisis together.
If we save even a single drop of oil, avoid wasting even a single plastic bag, show consideration for one another and commit ourselves to overcoming this together, we will pass through this tunnel safely and swiftly.
The government and I, together with all public servants, will lead with a sense of utmost urgency and resolve.
We will respond firmly, with zero tolerance, to those who exploit this crisis for unfair gain through price-fixing, hoarding, or similar acts.
I earnestly ask all citizens to actively take part in energy conservation in daily life, by using public transportation, reducing electricity use, and taking every possible step.
Our people have overcome many national crises and turned them into opportunity. I ask that we once again show that strength.
Let us conserve together, share the burden together, and overcome this crisis together.
I also respectfully ask for the cooperation of Speaker Woo Won-shik and all members of the National Assembly.
Please come together and fully support the prompt passage of this supplementary budget, which is essential to overcoming this crisis.
This budget will serve as both a breakwater protecting the people from the waves of crisis, and as a foundation for the Republic of Korea to rise again.
We must resolve this crisis, triggered by the Middle East war, with wisdom – turning it into an opportunity to strengthen our economic fundamentals and place our economy on unshakable ground.
Whether we succeed or fail depends on speed. I ask for bipartisan cooperation to ensure this budget is passed without delay.
In this national crisis, I hope to see the government and the National Assembly, the ruling and opposition parties alike, join hands and move forward with a single purpose: to serve the people and the nation.
Thank you for listening. Thank you very much.