Government Likely to Announce Additional Economic Measures Worth 2 to 3 Trillion Won Next Month

Gathering Funds and Contingency Reserves for Targeted Support of COVID-19 Affected Industries

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] The government is expected to announce additional economic measures worth 2 to 3 trillion won next month by pooling funds and contingency reserves. These additional support plans target small business owners and self-employed individuals affected by the resurgence of COVID-19. Industries suffering from the strengthened social distancing measures are also included in the support targets.

According to government officials on the 30th, the Ministry of Economy and Finance and other government departments plan to announce these supplementary economic measures next month. This is a concretization of President Moon Jae-in’s directive on the 25th to activate a strengthened quarantine system while minimizing economic damage and preparing measures for economic recovery. The announcement is expected as early as the beginning of next month, but no later than mid-month.

Inside and outside the government, there are forecasts that the scale of this supplementary measure will be a mid-level plan worth 2 to 3 trillion won. However, securing funding remains a key issue unless a 4th supplementary budget is prepared.

The Ministry of Economy and Finance is reportedly thoroughly reviewing not only the remaining funds but also the contingency reserves to secure this money. Regarding the funds, it is assumed that there is a connection to the nature of the supplementary measures and that surplus funds remain. Due to COVID-19, the resulting economic downturn, and unprecedented monsoon rains and heavy rainfall, budget authorities are reportedly facing considerable difficulties in securing resources.

The government is reviewing the extension and supplementation of various emergency measures announced in the first half of the year targeting small business owners, self-employed individuals, and employment-vulnerable groups. The original support measures for vulnerable groups were introduced in March, and the support period expires in September, six months later.

However, there are concerns that social consensus is needed on whether it is appropriate to extend these measures. Opinions vary between continuing the 90% increase measures due to the emergency situation and normalizing to two-thirds of the previous level to benefit more people, considering that the COVID-19 situation may continue.

Earlier, the government decided to extend measures such as the extension of loan maturities and interest payment deferrals, which are about to expire, as well as reductions and payment deferrals for airport facility usage fees and commercial facility rents.

Support plans are also being explored for restaurants, coffee shops, academies, bathhouses, saunas, DVD rooms, and other facilities affected by the implementation of Level 2.5 social distancing. Consumption stimulation plans for service industries such as wholesale and retail, tourism and travel, accommodation, and food services, which have been hit by the COVID-19 resurgence, are also under review.

However, regarding consumption activation measures such as the eight major consumption coupons, the focus is shifting toward allocating some to non-face-to-face consumption and resuming the rest quickly after the COVID-19 situation calms down.

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