South Korea considers extra budget to counter Middle East impact

The finance minister said the government will roll out the fuel price cap sometime this week. Read more at straitstimes.com.

SEOUL – South Korea will implement all available policy measures as needed, including a possible supplementary budget, to cushion the economy from the impact of escalating tensions in the Middle East, according to Finance Minister Koo Yun-cheol.

The government will consider extending fuel tax cuts while monitoring global oil prices and will respond swiftly if signs of instability emerge in the economy, Mr Koo said during an emergency economic meeting on March 11.

Authorities are also prepared to expand an existing market stabilisation programme worth more than 100 trillion won (S$86.81 billion) if needed.

The government and the Bank of Korea will coordinate additional measures such as emergency buybacks and outright purchases of government bonds to steady financial markets.

The remarks come as governments around the world consider how to deal with the fallout of the Iran war as it stretches to almost two weeks.

The International Energy Agency is mulling the largest release of crude oil reserves in its history to tackle elevated prices triggered by the conflict, the WSJ reported.