[Economic Outlook] Will the 3rd Supplementary Budget Pass the National Assembly?

(Photo) [Image source=Yonhap News]

[Asia Economy Reporter Joo Sang-don] With the term of the June extraordinary session of the National Assembly ending on July 4, attention is focused on whether the third supplementary budget bill, the largest ever, can pass the National Assembly this week. Also this week, indicators such as industrial activity trends and the Business Survey Index (BSI) will be released, which can gauge the extent to which the impact of the novel coronavirus infection (COVID-19) has affected production and business sentiment.

On the 27th, Kang Hoon-sik, chief spokesperson of the Democratic Party of Korea, said, "The third supplementary budget is the driving force for overcoming the COVID-19 national crisis and for the recovery of our country's economy," adding, "We will not wait any longer. We will definitely process the third supplementary budget within the deadline." This was a move to pressure the United Future Party by insisting that the third supplementary budget be processed within the June extraordinary session.

The third supplementary budget submitted by the government to the National Assembly is the largest ever at 35.3 trillion won. It is the first time in 48 years since 1972 that three supplementary budgets have been prepared in one year.

Statistics Korea will announce the May industrial activity trends on the 30th. Industrial activity trends are one of the indicators that reveal the current real economy situation in Korea. Total industrial production (seasonally adjusted, excluding agriculture, forestry, and fisheries) in April decreased by 2.5% compared to the previous month, marking the fourth consecutive month of decline. In particular, manufacturing production fell by 6.0%, the largest drop in 11 years and 4 months since December 2008 (-10.5%) during the financial crisis.

On the same day, the Bank of Korea will release the June Business Survey Index (BSI) and Economic Sentiment Index (ESI). If the number of companies expecting the economy to worsen during the period exceeds those with a positive outlook, the BSI falls below 100, and the lower the index, the stronger the negative outlook. The ESI combines the BSI with the Consumer Sentiment Index. The BSI had been declining for four consecutive months since December last year (76) but rebounded in May (53).

On July 2, Statistics Korea will announce the June Consumer Price Index trends. The May Consumer Price Index was 104.71 (2015=100), down 0.3% compared to the same month last year.

On the 3rd, the Bank of Korea will disclose the foreign exchange reserves at the end of June. At the end of May, Korea's foreign currency reserves stood at approximately 47.31 billion USD.

This content was produced with the assistance of AI translation services.