South Korea's opposition to pass budget amid political crisis

South Korea's opposition plans to pass the 2025 budget bill, aiming to resolve tensions after President Yoon's martial law decree. The budget, cut by 4.1 trillion won, has raised concerns over government functions, economic stability, and support for small businesses.

South Korea's main opposition party announced on Tuesday that it would approve the 2025 government budget bill, which prompted President Yoon Suk Yeol's martial law decree last week, during a plenary session scheduled for later in the day.

The opposition-controlled parliament had previously reduced the government’s proposed 677.4 trillion won ($473 billion) budget by 4.1 trillion won last month.

“We will pass the budget bill today,” said Democratic Party Leader Lee Jae-myung. “A swift passage of the bill will help address the current unease and crisis.” The government has warned that the budget cut would undermine basic functions, delay support for small businesses and vulnerable groups, and weaken its ability to respond to external challenges.

President Yoon cited opposition obstructionism over government budgets as one of the reasons for his martial law decree on 3 December, which sparked a constitutional crisis in Asia’s fourth-largest economy.

Senior Democratic Party lawmaker Park Chan-dae argued that any additional funding required for "spending for people's livelihoods" could be addressed later through a supplementary budget.

South Korea's treasury bond market saw a decline, with three-year treasury bond futures falling 0.10 points to 106.79.

"If finalised, that will ease uncertainty, but the market appears to be reacting somewhat sensitively and emotionally to the comments about an extra budget," said Kong Dong-rak, a fixed-income analyst at Daishin Securities.

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