South Korea passes $49.5bn extra budget ahead of local elections

South Korea’s National Assembly approved a 62 trillion won ($49.5bn) supplementary budget on Sunday aimed at supporting businesses hit by pandemic-related restrictions.

The amount approved was 2.6 trillion won ($2bn) more than the 59.4 trillion won announced last month and will mostly be used for cash handouts for small businesses and self-employed people to make up for losses incurred due to COVID-19 restrictions, the finance ministry said.

The additional spending comes after South Korean President Yoon Suk-yeol pledged to compensate 5.5 million owners of small businesses for pandemic losses shortly before taking office on May 10.

The extra budget also comes as the country is due to hold local elections on June 1, when South Koreans will vote for mayors and provincial governors.

The ministry said in a statement that it would not issue any bonds to fund the budget but instead would use tax revenue from existing spending plans.

South Korea in April lifted almost all pandemic restrictions, including a curfew for bars restaurants and cafes, as part of the country’s move towards living with the coronavirus.