Democratic Party of Korea (DPK) leader Rep. Lee Jae-myung, center, touches his glasses at the National Assembly in Yeouido, Seoul, Monday. Yonhap

Criticism is mounting against the main opposition party's move to railroad the provision of blanket per capita cash handouts of 250,000 won ($185) across the country.

Rep. Lee Jae-myung, leader of the Democratic Party of Korea (DPK), says the plan with a cost of 13 trillion won would "revitalize the economy," pressuring President Yoon Suk Yeol and economic policymakers to resort to debt financing over the ruling party's crushing defeat in the April 10 elections.

Experts say the measure will deteriorate the country's fiscal profile, as evidenced by similar botched policies under the Moon Jae-in administration that ended up causing a spike in government debt, increased taxes and a property market bubble.

Further amplifying the concerns are the rapid depreciation of the Korean won, coupled with persistently high inflation. This is a recipe for sustained economic woes, brought on and exacerbated by post-pandemic increases in borrowing costs amid elevated prices of goods and services.

Proponents of the plan say the increased cash in the market can spur consumption, but others say the argument lacks merit since more money ends up pushing prices up further.

Bank of Korea Governor Rhee Chang-yong opposed the plan.

Drafting an extra budget to help relieve the economic strains of the public is "shortsighted," he said during a meeting with media in Washington, Friday (local time).

Korea's debt-to-GDP ratio is 53 percent. Lee and main opposition lawmakers say the figure is low compared to the country's advanced peers, a grounds for bolstering the cash handout drive.

However, Rhee said the ratio is expected to spike to a range of between 70 percent and 90 percent in the next two decades, provided that the country's welfare spending is unrevised despite rapid population aging.

Bank of Korea Governor Rhee Chang-yong speaks during a meeting with local media in Washington, D.C., Friday (local time). Yonhap

"Claims of having room to maneuver are therefore very shortsighted, especially since it was based on a limited understanding and assessment of the current fiscal profile," he said.

The stimulus should instead be, in his view, precisely guided toward income-specific spending. Providing cash handouts across the board might seem easy, but the country's finances should have clear priorities to best help the most in need, he added.

"I do not think cash assistance or monetary easing are the cure-all for many of the challenges the country faces. The issues of low birthrates need a fundamental structural reform, a discussion that advances in stages of gradual social agreement."

The view followed Deputy Prime Minister and Finance Minister Choi Sang-mok, who said a day earlier that the role of fiscal spending should be a target-specific assistance.

"The extra budget is usually drafted in a recession," he said. "Preempting or navigating a recession is not a priority, but improving the livelihood or the socially underprivileged is."