Finance minister urges quick passage of extra budget

South Korea's finance minister called on lawmakers Wednesday to pass an extra budget quickly to help cushion the fallout of Middle East Respiratory Syndrome and economic uncertainties.
  

The government submitted the 11.2 trillion-won ($10.3 billion) supplementary budget plan to the parliament for approval on July 6, with policymakers initially expressing hope it would be passed by July 20. Rival parties have failed to see eye to eye on the budget's size, raising worries that it may not be passed within the month.
  

Speaking at the meeting of economy-related ministers in Seoul, Choi Kyung-hwan urged the National Assembly to approve the supplementary budget, part of a larger 22 trillion-won fiscal stimulus package, by Friday at the latest.
  

"The timely release of funds is critical for the country to overcome MERS and deal with the slower-than-expected pace of the global economic recovery and financial market uncertainties in China," he said.
  

The finance ministry also said the passage of the extra budget bill should not be delayed any longer because it is necessary for the country to pull off growth exceeding 3 percent this year.
  

The government downgraded the country's growth forecast from 3.8 percent to 3.1 percent last month, saying that even the lower number is contingent on the extra budget being approved and reaching the market quickly.

In addition, the finance ministry said that a delay in passing the extra budget will cause problems for the planning of the 2016 budget.
  

"The two budgets must be viewed jointly so a delay in the passage of one will naturally affect the other," it said.
  

Related to the delay, economists said the National Assembly must take action since the MERS outbreak and its fallout on domestic consumption are quite serious. They added that extra funds are needed to compensate for a 5.1 percent on-year drop in exports in the first half.
  

"MERS has taken a toll on certain service sectors, making it imperative that funds reach these businesses in a timely manner," said Lee Keun-tae, a fellow at the LG Economic Research Institute.
  

Other experts said the extra budget must be approved if the country's growth is to top the 3 percent mark.
  

"Delaying the passage of the extra budget will reduce its benefits," said Sung Tae-yoon, an economics professor at Yonsei University in Seoul. (Yonhap)