Vice Minister Ki Jae: "Income Inequality and Wealth Gap Expected to Worsen Due to COVID-19... Economic Recovery Is Top Priority"

[Asia Economy Reporter Jang Sehee] Kim Yong-beom, First Vice Minister of Strategy and Finance, said on the 21st, "Looking at past cases such as Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS), and Ebola, infectious disease outbreaks have deepened income inequality and the gap between rich and poor," adding, "The novel coronavirus infection (COVID-19) is also expected to roll back the global poverty clock to the 2015 level." This analysis is based on the sharp decline in global economic activity due to COVID-19. In fact, the Gini coefficient, an indicator of income inequality, increased by an average of 1.5% five years after an epidemic outbreak.

At the macroeconomic and financial meeting held at the Seoul Banking Hall on the same day, Vice Minister Kim said, "Depending on the success or failure of each country's response to the COVID-19 crisis, polarization between countries is expected to intensify." He cited infectious diseases, currency depreciation, and weak commodity prices as risk factors for emerging countries.

Regarding the increase in external debt in the first quarter of this year, Vice Minister Kim added, "It is a temporary phenomenon inevitably resulting from the response to the COVID-19 crisis," and "Korea's external debt soundness is still evaluated as favorable."

Regarding the '2020 First Quarter Household Trends Survey Results' announced by Statistics Korea on the same day, he said, "Public transfer income increased by more than 10%, and the effect of distribution improvement also increased compared to the same period last year, but it did not offset the sluggish labor income." He explained, "Since it is difficult to improve income distribution conditions, the top priority of economic policy will be placed on economic recovery and stabilization of people's livelihoods."

He pledged to make every effort to create jobs through the Korean New Deal. He said, "Investment in information technology (IT) infrastructure promoted during the past IMF foreign exchange crisis made South Korea the IT powerhouse it is today," adding, "We will accelerate investment in digital infrastructure looking ahead 10 to 20 years."

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