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(LEAD) Decisive action needed to boost spending as economy faces further slump: Moon

Politics 11:47 April 28, 2020

(ATTN: UPDATES with more details in paras 7, 11-13)

SEOUL, April 28 (Yonhap) -- President Moon Jae-in on Tuesday called for swift and decisive policy action to revitalize the economy hit by the coronavirus pandemic, as Asia's fourth-largest economy is planning on a multi-trillion-won extra budget to boost domestic demand.

"We need to become a swift government first and foremost. The damage will become bigger and difficulties of the people and businesses will become more severe if executions of measures are delayed," Moon said at a Cabinet meeting at the presidential office of Cheong Wa Dae in Seoul.

Moon warned that the economy is expected to face further negative momentum in the second quarter, highlighting the state of unprecedented economic turbulence in recent years.

South Korea's economy contracted 1.4 percent on-quarter in the first quarter of this year, marking the sharpest quarterly contraction since the fourth quarter of 2008.

"Second quarter economic growth is expected to face much more negative flow compared with the first quarter, during which (the nation) recorded negative growth," Moon said.

"The state of the real economy and impact on employment for the time being is increasingly worrisome," the president added.

The president also highlighted the significant expansion in the rate of the decrease in exports this month. "The economic shock in all economic sectors, of which the end is unforeseeable, is becoming a reality."

The Moon administration announced at the end of March that it would grant the direct financial support of up to 1 million won (US$814) to all families here except the top 30 percent by income. The government later decided to expand beneficiaries to all nationals.

"The government should speed up its time table to boost spending. Purchase coupon programs should be carried out in earnest and measures to boost spending momentum, including those that the government has decided, such as early payment and early purchase programs, should also be considered," Moon said.

The National Assembly plans to hold a plenary session Wednesday to handle the proposed extra budget.

The president also explained that an additional third extra budget package, which the government is currently in the process of devising, will include a comprehensive plan to promote a rebound in domestic consumption.

Moon, meanwhile, ordered officials to prepare for the economy's "post-corona age," notably in areas of investment and creation of new jobs.

He asked each ministry to seek programs to promote new employment opportunities, especially in areas related to the information-technology industries.

South Korean President Moon Jae-in (R) presides over a Cabinet meeting on April 28, 2020, at the presidential office of Cheong Wa Dae in Seoul. (Yonhap)


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