The Short-Lived Effect of Emergency Disaster Relief Funds... Gyeongbuk Province's Individual Card Spending at 'Last Year's Level'

Gyeongbuk Province Analyzes Card Sales Data Post-COVID-19
Corporate (-23%) and Foreigners (-60%) Still Not Recovered
Subsidy Spending Accounts for 18% of Total Card Consumption in May

On the afternoon of June 11, thick sea fog was seen surrounding the downtown area of Pohang, Gyeongbuk.
[Image source=Yonhap News]

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongwook Park] The scale of credit card consumption within the Gyeongbuk Province (estimated amount) showed a clear recovery trend starting from the third week of May, when the government's emergency disaster relief funds began to be distributed in earnest, and it has recovered to last year's level.

However, when looking at the amount of credit card spending by Gyeongbuk residents outside the region, it dropped by nearly 20% compared to the previous year, and corporate and foreign credit card expenditures within the region also decreased by about 20% and 60%, respectively, reflecting the frozen economic sentiment of local residents.

According to Gyeongsangbuk-do on the 14th, an analysis of regional consumption trends was conducted using sales data converted to the overall market share of credit card companies based on Shinhan Card's card consumption amount from February, when local infections of the novel coronavirus began, to recently. The credit card consumption amount within the province showed a clear increase starting from the third week of May.

The estimated card consumption amount in Gyeongbuk Province in May was 1.123 trillion KRW, which was 7% (89.1 billion KRW) less than the same month last year. Weekly decrease rates were 13% in the first week of May, 6% in the second week, 1% in the third week, and 3% in the fourth week. By consumption entity, individuals decreased by only 6% compared to the same month last year, while corporations and foreigners decreased by 23% and 60%, respectively.

By region, the in-region (card) consumption amount was 782.9 billion KRW (69% of total card consumption), which decreased by only 1% compared to the same month last year, but the out-of-region consumption amount was 347.9 billion KRW (31% of total consumption), which decreased by 19% compared to the same month last year. The in-region card consumption amount actually increased compared to last year starting from the second week of May. It increased by 2% in the second week and by a remarkable 12% in the third week due to the impact of the emergency disaster relief funds.

The operating rate of self-employed businesses (the ratio of stores generating sales) increased from 59% in March to 68% at the end of May, indicating that the emergency disaster relief funds also acted as a factor to ease the situation for self-employed people.

Meanwhile, as of May 31, emergency disaster relief funds in Gyeongbuk Province were paid to 1.15 million households (95% of all households) amounting to 723.6 billion KRW (97% of total support funds). The payment methods were 57% via credit (check) cards, 19% in cash, and 11% in gift certificates. The amount used through credit (check) cards for emergency disaster relief funds was 201.2 billion KRW, accounting for 18% of the total card consumption in May. The usage locations were offline distribution such as marts (33%), daily life services such as gas stations (26%), and F&B such as Korean restaurants (24%) in order.

Kim Jang-ho, Director of Planning and Coordination at Gyeongbuk Province, evaluated, "Through this big data analysis, we were able to confirm that the emergency disaster relief funds from Gyeongbuk Province and the government have been of great help to the underprivileged and self-employed people in the province who are facing difficulties," and added, "We will continue to re-examine the quarantine measures taken so far and make every effort to restore the livelihood economy in preparation for the prolonged COVID-19 situation."

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