Finance minister calls for preparation for prolonged Middle East crisis

A motorist rides past dummy models of Iranian missiles installed along the roadside at Valiasr Square in Tehran, Sunday. AFP-Yonhap

Finance Minister Koo Yun-cheol on Sunday called for proactive policy measures to prepare for a prolonged Middle East crisis, as the conflict surrounding Iran has pushed up global oil prices and heightened economic uncertainties.

"In addition to the swift formulation and execution of a supplementary budget, we must actively identify and utilize a range of policy tools that do not require budget spending, such as financial, tax and regulatory measures," Koo said during an inter-ministerial meeting on the Middle East crisis, according to the Ministry of Economy and Finance.

The minister warned that rising global oil prices amid supply disruptions could increase overall inflationary pressure, urging thorough on-site inspections to ensure the effective implementation of the price cap system for petroleum products, along with other measures to stabilize consumer prices.

Koo also emphasized the need to swiftly devise energy supply management plans, such as expanding alternative power generation and promoting energy conservation, the ministry said.

The government has been scrambling to come up with various policy measures since the conflict began at the end of February to minimize its impact on markets and the broader economy, as the country is heavily dependent on energy imports.

The ruling Democratic Party of Korea and the government agreed to draw up and submit this year's first supplementary budget bill to the National Assembly by end-March, after President Lee Jae Myung ordered swift preparations to cope with the fallout from the ongoing conflict.