South Korea president calls for extra budget to be ready swiftly

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SEOUL (Reuters) -South Korean President Lee Jae-myung urged officials on Monday to swiftly draw up a supplementary budget plan aimed at supporting economic recovery and spurring consumption, his office said.

Lee, who took office last week, has made economic recovery a priority, launching an emergency economy taskforce with government officials.

The economy contracted in the first three months of the year as exports and consumption stalled amid fear over the impact of U.S. tariffs, fanning expectations of interest rate cuts.

If the extra budget is finalised under Lee, that would add to the country’s earlier supplementary budget of 13.8 trillion won ($9.7 billion) approved on May 1.

During his election campaign, Lee had emphasised the need for an extra budget to provide short-term economic stimulus.

At the taskforce meeting on Monday, he also asked for measures to stabilise prices, saying the increasing cost of living is causing “too much pain”.

“Prices are causing too much pain for the people, so please check the current situation and see if there are any possible measures and report them even before the next meeting,” Lee said, referring to higher prices of instant noodles.

Prices of chicken and eggs have risen since an outbreak of avian flu in Brazil, a vice finance minister told Lee during the meeting.

The government has restricted chicken imports from avian flu-affected areas in Brazil.

The left-leaning president is expected to pursue fiscal expansion policies, including increased cash subsidies and welfare, aimed at bolstering economic growth despite concerns over rising debt levels.

(Reporting by Ju-min Park and Cynthia Kim; Editing by Christopher Cushing and Jacqueline Wong)