[THE INVESTOR] The South Korean economy faces a triple whammy of an uncertain extra budget, a downturn in oil prices and a highly volatile local currency, according to economic analysts on Aug. 3.

According to recent central bank data, the country’ gross domestic product expanded a mere 0.7 percent in the April-June period from a quarter earlier, though it marked an improvement from a 0.5 percent on-quarter gain three months earlier.

In a desperate bid to give a fillip to the economy that is forecast to grow in the 2 percent range in 2016 following a 2.6 percent expansion the previous year, the government presented an 11 trillion-won (US$9.90 billion) supplementary budget bill to the National Assembly late last month.

Analysts say the biggest factor in determining the second-half performance of the local economy will be when the parliament passes the extra budget, because timing is crucial for fiscal stimulus.

The government had expected the assembly to approve the supplementary budget in an Aug. 12 plenary session, but ruling and opposition parties remain divided over the schedule as the opposition camp demands tougher scrutiny and attaches other conditions, sparking worries about a significant delay.

The bipartisan bickering has spawned concern that the government may face a setback in its plan to maximize the effects of the extra budget by implementing it as quickly as possible.

Experts also say another downside risk for the South Korean economy is a downtrend in crude prices. The average price of Dubai crude, which accounts for over 80 percent of the country‘s overall oil imports, hovered in the low $40-per-barrel range in July after hitting $46.3 the previous month.

Falling oil prices are seen as a double-edged sword for corporate Korea as they could put a dent in the economies of oil-exporting countries in the Middle East and Latin America, which may in turn have a negative impact on South Korea’s exports.

The sluggishness of those economies could also come as a drag for struggling South Korean shipbuilders, shipping companies and builders due to a delay in construction and offshore plant projects, as well as canceled contracts.

On top of falling oil prices, the high volatility of the South Korean currency against the dollar is further stoking uncertainty surrounding the local economy.

A stronger local currency is usually deemed a big obstacle for export-dependent Korea Inc. as it makes exports more expensive in overseas markets.

In addition, a highly volatile local currency is feared to come as a burden to the local economy by sharply expanding liquidity on the domestic foreign exchange market and thus amplifying investor jitters.

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