South Korea warns of economic emergency

South Korean President Lee Jae Myung on Tuesday warned of an imminent economic emergency as the Middle East conflict continues to impact energy supplies.

At a Cabinet meeting, she said an emergency economic decree could be issued if necessary, allowing the president to enact measures without prior approval from the National Assembly, state news agency Yonhap reported.

Such a decree is typically invoked during severe financial crises, natural disasters, or internal unrest. The measure was last used in 1993 under former President Kim Young-sam.

"South Korea, which is highly dependent on external markets and relies heavily on energy supplies from the Middle East, requires more thorough inspections and detailed emergency measures," Lee said.

South Korea imports about 55% of its energy sources from the Middle East.

Lee urged all relevant ministries to closely monitor the situation and take "preemptive, bold action" to alleviate concerns over potential disruptions.

"Key raw materials, such as urea solution, helium and aluminum, should be strictly managed at levels equivalent to wartime supplies," he said.

Earlier, he urged a quick transition to renewable energy sources.

The Seoul government on Tuesday also proposed a supplementary budget of 26.2 trillion won ($17.1 billion) largely aimed at cushioning the impact of surging fuel prices. The budget will include cash handouts for about 70% of the population.

The US-Israel war with Iran and tensions in the Strait of Hormuz have disrupted regional energy flows, contributing to shortages and price pressures worldwide.