Analysis of the First Supplementary Budget Proposal for 2026

 

Published on April 1, 2026
Published by Budget Analysis Coordination Division



 

    The government submitted the First Supplementary Budget Proposal for 2026 to the National Assembly on March 31, with total expenditures of KRW 25.2 trillion. This proposal is intended to address the oil price crisis triggered by the outbreak of war in the Middle East, stabilize the livelihoods of vulnerable populations, support affected industries and companies, and stabilize supply chains.
   The Korean economy entered 2026 with expectations of growth in the 2 percent range, supported by a super cycle in the semiconductor sector and a recovery in domestic demand. However, the outbreak of war in the Middle East in late February led to marked deterioration in external conditions, including sharp increases in international oil prices and the KRW–USD exchange rate. Given the Korean economy’s high dependence on energy imports, the impact of high oil prices and a weaker won has materialized rapidly. Moreover, depending on developments in the Middle East, downside risks to economic growth in the second half of the year may intensify, highlighting the need for timely fiscal intervention.
   NABO has published its “Analysis of the First Supplementary Budget Proposal for 2026” to support the National Assembly’s effective deliberations under these severe economic conditions. The report identifies key issues requiring focused discussion and presents related policy recommendations.
   Chapter I provides a comprehensive analysis of the supplementary budget proposal, including its main features; the appropriateness of financing measures; fiscal aggregates such as national tax revenue, fiscal balance, and government debt; as well as analyses of macroeconomic effects and of major policy areas. Chapter II presents an in-depth analysis of individual programs by ministry, focusing on their urgency, feasibility of execution, and effectiveness.