[Weekly Outlook] Final Coordination on Supplementary Budget in Focus... BOK to Announce Export-Import Price Index

[Image source=Yonhap News]

Next week, attention will focus on whether the ruling party, opposition, and government, whose positions remain at an impasse, will be able to process the supplementary budget bill. As negotiations over the size of the supplementary budget show little progress, a fierce final tug-of-war between the National Assembly and the government is expected to unfold by early next week.

According to political circles on the 13th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, will appear before the National Assembly on the 14th to engage in last-minute coordination over the increase in the supplementary budget size.

Initially, the government submitted a supplementary budget bill worth 14 trillion won based on excess tax revenue, but the National Assembly argues that more than double the amount is necessary due to the rapid increase in Omicron cases and the accumulated damage to small business owners.

The government maintains that since a considerable amount of fiscal spending has already been made for COVID-19 recovery, it is difficult to increase the budget to the level demanded by the National Assembly.

The Democratic Party of Korea has set the National Assembly processing deadline as the 14th, but given the significant differences between the party and government positions, the passage of the bill remains uncertain.

On the 16th, Statistics Korea will announce the employment trends for January. Attention will be on how the strengthened quarantine measures, following the rapid spread of Omicron, have affected employment.

In December last year, the number of employed persons was 27,298,000, an increase of 773,000 compared to the previous year. This is the largest increase in 7 years and 10 months since February 2014.

Since employment showed an increasing trend in December last year despite the strengthened quarantine measures, there is interest in whether this trend will continue in January.

The Bank of Korea will announce the export and import price indices for January on the 15th.

As of December last year, the import price index fell 1.9% from the previous month, and the export price index dropped 1.0%. At that time, the decline in oil prices caused the rise in export and import prices to slow somewhat.

However, with the global economic recovery combined with geopolitical risks from Russia and Ukraine, oil prices have turned to an upward trend at the beginning of the year, so it is highly likely that export and import prices in January will show an upward trend again.

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