Exhausted 'Cashback Budget'... Daejeon City Expects Operational Gap in Ontong Daejeon

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The cashback budget for the local currency Ontong Daejeon is running out, which is expected to cause disruptions in its operation.

According to Daejeon City on the 15th, the Ontong Daejeon cashback budget was originally set at 140 billion KRW until the supplementary budget was prepared in September, with plans to secure additional funds through the supplementary budget to cover expenses until the end of the year.

However, as the budget is expected to be exhausted about two months earlier than anticipated, operational disruptions are expected.

The city analyzes that the main cause of the early budget depletion was the sharp increase in Ontong Daejeon issuance as consumer sentiment revived following the start (transition) of voluntary COVID-19 quarantine measures in April, combined with the fact that only a portion of this year’s cashback budget was initially allocated and operated.

In particular, the burden increased as the city must cover incentives solely with its own resources without government support starting in the second half of the year. There are concerns that this will become a burden for the newly launched 8th term of the municipal administration.

A city official said, “With the current 500,000 KRW limit and 10% cashback rate applied, the cashback budget is expected to be exhausted by next month,” adding, “Considering that the supplementary budget is scheduled for September, there may be an operational gap.”

He added, “We have urgently reported this situation to Mayor-elect Lee Jang-woo and will focus on promptly preparing countermeasures.”

Meanwhile, to operate the cashback normally until the end of this year, the city is estimated to need an additional budget of 108 billion KRW based on maintaining the current 500,000 KRW limit and 10% cashback.

Currently, Ontong Daejeon has about 580,000 users who spend an average of 370,000 KRW per person per month, with the corresponding cashback budget averaging 21 billion KRW per month and about 250 billion KRW annually.

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