DIGIVESTASI - South Korean Stocks Rally After President Yoon Suk Yeol's Impeachment, South Korea’s stock market strengthened on Friday (December 13, 2024) following the parliament's decision to impeach President Yoon Suk Yeol. According to a Reuters report, the rally was fueled by investor optimism that the country’s political uncertainty would soon ease after the vote.

Push for Supplemental Budget to Revive the Economy

The leader of South Korea’s Democratic Party, Lee, identified weak domestic consumption as the country's main challenge, driven by low domestic demand and limited government fiscal activity. He called for the establishment of a National Stability Council involving both the government and parliament to address issues related to finance, the economy, and public livelihoods.

“To tackle these challenges, I believe immediate discussions on a supplemental budget are necessary,” Lee stated on Sunday (December 15, 2024). He proposed allocating additional funds to support small businesses and to invest in artificial intelligence and energy infrastructure to address supply bottlenecks.

Parliament Cuts Government Budget Proposal

In related developments, South Korea's parliament, dominated by the Democratic Party, approved the 2025 national budget at 673.3 trillion won (approximately $470.6 billion). This figure is lower than the government’s proposal of 677.4 trillion won.

Under South Korean law, parliament is prohibited from adding to the government’s proposed budget allocation. However, the Democratic Party insists that additional funds are essential for welfare programs supporting public well-being.

The party explained that the budget cuts primarily targeted government reserve funds, interest costs, and allocations to the offices of the president, prosecutors, and auditors designated for confidential operations. Meanwhile, the government accused parliament of hindering projects for small businesses due to the budget reductions.

Martial Law and Budget Deadlock

Budget disagreements were one of the key triggers behind President Yoon’s declaration of martial law, a decision that escalated political tensions and ultimately led to his impeachment. Resolving budgetary disputes is now seen as critical to stabilizing the economy and reviving struggling domestic consumption.

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