Hong Nam-gi "Negative growth inevitable this year... Expected around -1%"

"3 Trillion+α Support for Directly Affected by COVID-19... Payment Before Seol"

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Economy and Finance, is delivering opening remarks at the '5th Innovation Growth Strategy Meeting' held at the Government Seoul Office in Jongno-gu, Seoul, on the 3rd. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Kim Hyunjung] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, predicted that this year's economic growth rate will record a negative growth of around -1%. To provide relief for damages caused by the third wave of the novel coronavirus infection (COVID-19), he announced a plan to provide targeted support amounting to '3 trillion won + α', with the support funds to be distributed to confirmed recipients before the Lunar New Year.

On the afternoon of the 3rd, Deputy Prime Minister Hong appeared on Yonhap News TV's 'News 13' and, while explaining the 2021 budget approved by the National Assembly plenary session, responded to the host's question about this year's economic growth forecast by saying, "Due to various conditions, negative growth is inevitable," and added, "I expect it to be around -1% this year."

He then mentioned that the 1.1% growth in the third quarter marked the highest quarterly growth rate in 11 years, emphasizing, "This is not a complacent view, but I hope economic agents and the public can overcome this with confidence and hope." Regarding next year's growth, he said, "International organizations and investment banks (IBs) are also forecasting growth of about 3%," and explained, "We will announce the economic policy direction in mid-month, along with forecasts for this year and next year's economy." He also projected, "Although uncertainties related to COVID-19 are expected to continue for some time next year, domestic and external conditions will improve compared to this year, which was directly hit by the shock."

Regarding the 558 trillion won budget approved by the National Assembly the previous day, he explained, "It will contribute to raising next year's growth rate through private consumption, investment, exports, and revitalization of regional economies." In particular, he referred to the COVID-19 damage relief budget as '3 trillion won + α', stating, "We included a budget of 3 trillion won because additional support is needed for small business owners and others who faced operational restrictions due to the COVID-19 spread in November." He also emphasized, "The actual support targets will be analyzed based on the extent of damage, but we will provide customized support targeted at sectors and groups directly affected by the third wave."

Regarding concerns about fiscal soundness due to the issuance of deficit-financing bonds, he said, "To overcome the current COVID-19 crisis, the fiscal role must continue for the time being," but added, "However, even if we can manage it, the rapid increase in national debt is something we are very cautious about as those responsible for fiscal management." He continued, "Once economic recovery and rebound are achieved, a virtuous cycle will be possible," and added, "We will strive to resolve the already high national debt and fiscal deficit."

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