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S. Korea unveils 2nd extra budget of 7.6 tln won for aid to virus-hit households

All News 10:00 April 16, 2020

SEJONG, April 16 (Yonhap) -- South Korea's finance ministry on Thursday unveiled a second extra budget of 7.6 trillion won (US$6.3 billion) to give shopping coupons and gift certificates to households to help them cushion the economic fallout from the coronavirus pandemic.

Along with budgets from local government, the central government will spend 9.7 trillion won for the one-time relief package for 14.78 million households, about half of the nation's total households, the Ministry of Economy and Finance said in a statement.

The second extra budget came more than a month after the National Assembly approved a 11.7 trillion-won supplementary budget, which marked the nation's largest-ever extra budget bill to handle the fallout from a contagious disease.

Under the latest support measure, 1 million won will be given to each household with four or more people that rank in the bottom 70 percent of gross income, ministry officials said.

Eligible single-person households will receive 400,000 won, while two-person households and three-person households will receive 600,000 won and 800,000 won, respectively.

Finance Minister Hong Nam-ki has said the government "promises that it will mobilize all resources and act boldly and quickly until the crisis ends."

The emergency cash payments will be offered in the form of shopping coupons and gift certificates, not cash handouts, in order to encourage people to spend them.

The ministry said it will not issue bonds to fund the second extra budget and the second budget will be funded by readjusting this year's annual budget and cutting costs.

The ministry said it will submit the second extra budget bill Thursday to the National Assembly for approval.

South Korea's export-reliant economy is expected to suffer a bigger hit from the pandemic as the novel coronavirus disrupted global businesses and ravaged consumer demand.

Last month, the Korean government unveiled plans to double the size of its emergency-financing aid package to 100 trillion won for businesses here under growing stress from the coronavirus pandemic.

In a bleak outlook, the International Monetary Fund (IMF) predicted this week that South Korea's economy would contract 1.2 percent this year.

The IMF predicted the global economy would shrink 3 percent this year, saying the coronavirus pandemic would bring the worst economic pain since the Great Depression of the 1930s.

The Korean economy grew 2 percent from a year earlier last year, the slowest on-year growth since 2009.

The latest extra budget is the fifth under the Moon Jae-in administration.

In 2017, the current administration set aside a further 11 trillion won to create more jobs and then an additional 3.8 trillion won in 2018 for the same purpose.

Last year, the Moon administration also formed a 6.7 trillion-won supplementary budget to fight fine dust and help the economy.


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