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4th extra budget aims to help small merchants gripped by virus resurgence

All News 13:47 September 10, 2020

SEJONG, Sept. 10 (Yonhap) -- A fourth supplementary budget worth 7.8 trillion won (US$6.6 billion) is mainly aimed at helping small merchants and self-employed people cushion the economic impact of a recent resurgence of the new coronavirus.

The additional fiscal boost came less than a month after health authorities tightened social distancing rules to contain a new wave of contagion, amid growing concerns that the nation's economic slump may be deeper than expected.

Presiding over an emergency economic council meeting, President Moon Jae-in said the fourth extra budget is a "tailored" relief package for the business sector that suffered the most damage from the virus resurgence.

The resurgence of the new coronavirus has "rapidly put a damper on all economic activities and delayed the pace of an economic rebound," Moon said.

In particular, small merchants and self-employed people have felt the pinch of the elevated social distancing rules because they are suffering from lost income and high rental costs, Moon said.

Since late last month, restaurants and smaller eateries in the greater Seoul area have been required to operate until 9 p.m., and only takeaway and delivery are permitted from 9 p.m. to 5 a.m.

For franchise coffee chains, bakeries and ice cream parlors, only takeout and delivery have been permitted regardless of operating hours.

It marked the first time in 59 years for the South Korean government to allocate four extra budgets in a single fiscal year.

President Moon Jae-in speaks during an emergency economic council meeting at Cheong Wa Dae in Seoul on Sept. 10, 2020. (Yonhap)

President Moon Jae-in speaks during an emergency economic council meeting at Cheong Wa Dae in Seoul on Sept. 10, 2020. (Yonhap)

About half of the fourth extra budget, or 3.8 trillion won, will be spent for small merchants and self-employed people.

Of that, the government plans to provide 3.2 trillion won in cash handouts to 2.91 million small merchants and self-employed people.

Another 1.4 trillion won will be used to help virus-hit companies maintain 1.19 million jobs, Moon said.

In May, the government offered some 1.5 trillion won in subsidies to temporary or freelance workers who lost their jobs due to the coronavirus pandemic.

The fourth extra budget will give more subsidies to temporary or freelance workers.

As people go contactless in the wake of the pandemic, the government will give a certain amount of money to help people aged 13 or older cut costs of their telecommunication fees.

The government is expected to submit the fourth extra budget bill to the National Assembly on Friday.

Moon urged lawmakers to swiftly approve the bill to help the government implement the budget ahead of the Chuseok holiday season that begins on Sept. 30.

Pounded by the coronavirus outbreak, the nation's economy has plunged into a recession as its gross domestic product shrank 3.3 percent in the second quarter after a 1.3 percent on-quarter retreat three months earlier.

Earlier this week, Korea Development Institute, a state-run think tank, downgraded the nation's economic growth outlook to a contraction of 1.1 percent this year, a sharp downward revision from a 0.2 percent expansion in its May forecast.

So far, South Korea has pledged 277 trillion won in stimulus packages to help the nation's economy recover from the pandemic.


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