Kim Du-kwan: "We Must Prepare a Second Disaster Relief Fund to Prevent GDP Decline"

[Asia Economy Reporter Jeon Jin-young] Kim Du-gwan, a member of the Democratic Party of Korea, argued on the 27th for the necessity of a second disaster relief fund to prevent a decline in Gross Domestic Product (GDP).

[Image source=Yonhap News]

On the morning of the same day, Kim said on Facebook, "It is time for the government and the National Assembly to discuss the second disaster relief fund to prevent any further decrease in GDP."

He stated, "GDP in the second quarter of this year decreased by as much as 3.3% compared to the first quarter, and industrial production has been negative up to May. However, the service industry and retail sales have uniquely increased," adding, "Private consumption, which increased due to the first disaster relief fund, is effectively preventing a further decline in GDP."

He continued, "In a country that relies on exports, exports have decreased by 16.6%, which is a very serious situation, but private consumption increased by 1.4%, centered on durable goods such as passenger cars and home appliances, and government consumption also increased by 1.0%. This clearly shows how crucial the emergency disaster relief fund has been," he emphasized.

Kim analyzed, "In the second quarter of this year, private consumption revived due to the release of disaster relief funds, and it is correct to see that this at least prevented a larger decline in GDP."

He said, "According to data analyzing the effects of the disaster basic income paid by Gyeonggi-do in April, credit card sales at local currency affiliated stores increased by as much as 30%, and expenditures increased among the middle-income groups in the 2nd to 4th income quintiles, who are capable of consuming durable goods. This point is important. If the government supports the consumption power of the people, they will consume durable goods and prevent further declines in GDP."

He added, "There is no time to waste. If consumption does not support GDP while there is no sign of COVID-19 calming down, there will be serious problems with the growth rate. The economy is heavily influenced by psychological factors. We must start preparing the second disaster relief fund so that private consumption can serve as a buffer to prevent further declines in GDP growth rate. The market will respond even to the news of the preparation of disaster relief funds," urging for swift discussions.

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