Finance Minister Yoo Il-ho said on Tuesday that the government could propose a supplementary budget in a record scale of more than 20 trillion won ($17 billion) if the country’s first-quarter economic performance turns out “disastrous.”

He also said the government will take “decisive” steps upon gaining firm proof on China’s trade and economic retaliatory actions on Korean companies in relation to its complaint over Seoul’s security decision to install U.S. antimissile system Terminal High Altitude Area Defense (THAAD).

The remarks were made during his address to the Maekyung Economist Club Lecture held at Maekyung Media Center in Seoul.

“Economic sentiment became worse as domestic consumption turned negative, and external uncertainty rose after the surprise election victory of Donald Trump and amid anticipation of faster-than-expected interest rate hikes in the U.S. on top of Korea’s ongoing political unrest,” he said.

Experts at home and abroad have been advising more aggressive fiscal action as the economy is expected to grow in the slowest pace in many years this year amid sinking consumer and corporate sentiment due to leadership uncertainties in a year the country would elect a new president faster than the scheduled December and must combat an economic crisis.

The Park Geun-hye administration drafted a supplementary budget three times to bolster a weak economy with 17.03 trillion won in 2013, 11.6 trillion won in 2015 and 11 trillion won in 2016, but only half of the budget was actually implemented, leaving the annual gross domestic product growing around mid-2 percent range since 2015.

“The government will work closely with the Bank of Korea,” suggesting mix of fiscal and monetary stimuli action.

Yoo said the government will deal firmly with China’s non-tariff barriers such as a ban on Korean-made entertainment content and rigorous quality standards against Korean cosmetics. “Frankly, this is a challenging issue because China remains silent about whether these measures are associated with the THAAD deployment. But we will respond fair and square when there is clear evidence,” he explained.

By Cho Si-young

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