This comes on top of a previous stimulus package worth US$ 80.2 billion. The money will help businesses keep employees on their payroll. Temporary workers and the self-employed will also get financial help. Families will get shopping coupons and gift certificates. The local labour market has been badly affected by the drop in foreign demand for South Korean goods.
Seoul (AsiaNews/Agencies) – The South Korean government is allocating an additional 89.4 trillion won (US$ 72 billion) to help businesses and workers during the pandemic crisis.
The new stimulus comes on top of a previous package of 100 trillion won (US$ 80.6 billion). The goal is to prop up the country’s labour market.
The aid programme also includes 35 trillion won (US$ 28.2 billion) to provide liquidity to small and medium-sized businesses. Most of this will be used to buy more corporate bonds.
A fund of 40 trillion won (US.6 billion) will provide aid to key sectors, including airline, auto, shipping and oil refinery industries. Another 10 trillion won (US$ 8.4 billion) will protect jobs by helping businesses keep their employees on the payroll.
About 930,000 self-employed and temporary workers who lost their jobs will get a monthly subsidy of 500,000 won (US$ 420) for three months. A further 4.4 trillion billion won (US$ 3.7 billion) will help small businesses get loans at subsidised rates.
Last week, President Moon Jae-in unveiled a second supplementary budget of 7.6 trillion won (US$ 6.1 billion) to counteract the recessive effects of the pandemic. It includes shopping coupons and gift certificates for South Korean families.
South Korea is among the countries that reacted most effectively to the coronavirus outbreak. Seoul did not impose extreme confinement and economic lockdown measures like China or other countries.
However, the employment figures worry the government. In March 195,000 South Koreans lost their jobs, the sharpest monthly decline since May 2009, during the US mortgage subprime crisis.
The International Monetary Fund expects South Korea's GDP to shrink by 1.2 per cent this year.
The drop in domestic consumption is less significant than the drop in foreign demand. In 2019, the country exported goods worth US$ 542 billion.
The closure of borders imposed by many partners to contain COVID-19 has already had a considerable impact on the economy: in the first 20 days of April, South Korean exports fell by 27 per cent, to US$ 21.7 billion.