The Korean government has drawn up its second supplementary budget proposal of 2021 and has made 11 changes to the fund operation plan in order to ① support small businesses and people affected by COVID-19, ② ensure proper control of the disease, and ③ improve people’s livelihoods and combat polarization preemptively through employment and low-income household supports.
Since this supplementary budget aims to support small businesses and people affected by COVID-19, strengthen disease control capacity, and improve citizens’ livelihood, the government should focus on the timing of the policy implementation to maximize the effect of the projects.
Although the national debt-to-GDP ratio has been partially improved through this supplementary budget, the government should stay vigilant as the government bond yields have been on the rise since the second half of 2020, which may put more interest burden on government, corporate, and household debts.