Government Takes Direct Action on 'Advance Payment for Good Consumption'... 2.1 Trillion KRW Advance Purchases of Cars and Airline Tickets

Government Announces Measures to Supplement Domestic Demand through Prepayment and Advance Purchase

[Asia Economy Reporter Kim Hyunjung] The government is policyizing and introducing the 'advance payment good consumption' movement, which is spreading in the private sector. The intention is to quickly reinforce demand in affected industries centered on the public sector to revive the rapidly shrinking domestic market due to the COVID-19 pandemic, and to encourage private sector participation to prevent a consumption cliff.

On the 8th, the government announced the 'Measures to supplement domestic demand through advance payment and pre-purchase' and stated that it will revive the consumer market by paying for goods and services in advance to reinforce demand in affected industries such as dining, services, tourism, and floriculture. The scale of public procurement announced by the government on this day alone amounts to 2.1 trillion won.

The government plans to make early purchases worth 800 billion won in the first half of the year, focusing on assets that can be stockpiled, such as 10,000 smart devices to support vulnerable students preparing for online school openings, old desks and chairs, blackboards, school supplies, quarantine and hygiene materials, medicines, and supplies and consumables needed for safety, testing, inspection, and maintenance related to public institutions' unique projects.

In the same way, 90 billion won of business promotion expenses will be prepaid to dining establishments, and 80% (160 billion won) of remaining airline tickets for overseas travel expenses will also be prepaid. The tickets, which are not designated for specific routes, must be used within this year, with the balance settled by the end of the year.

Contracts for postponed or second-half planned international events, meetings, and local festivals will also be signed early, with up to 80% (140 billion won) prepaid. Outsourced service contracts for maintenance and repair of public institutions will be signed early, spending 510 billion won in advance. The central government will expand the full execution of customized welfare points used in culture, leisure, and dining sectors within the first half of the year to local governments and public institutions. This cost is also expected to be 190 billion won.

Additionally, to support the automobile industry facing difficulties such as decreased demand, about 1,600 business vehicles planned for the second half of the year will be purchased in the first half (50 billion won), and 150,000 barrels of domestically produced diesel and 490,000 barrels of crude oil will also be pre-purchased in the first half (31 billion won). Some of the mask stockpile planned for purchase in the second half (supplementary budget of 70 billion won) will be contracted early in the first half, with up to 80% (45 billion won) prepaid. Also, 70% (50 billion won) of the operating expenses for rental-type private investment facilities (BTL) such as national university dormitories and military facilities planned for the second half will be paid in advance.

This content was produced with the assistance of AI translation services.