the Interior Ministry describes it as a nationwide scheme aimed to spark economic revival through increased consumption
South Korea is initiating an extensive cash handout program, which officials have referred to as “consumption coupons,” aimed at enhancing domestic spending and revitalizing the nation’s sluggish economy, as reported by the Korea Herald.
This initiative is part of a supplementary budget amounting to 31.8 trillion won ($23.3 billion) that was approved by the National Assembly on Friday. The program is set to commence on July 21 and will continue until September 12.
Vice Interior Minister Kim Min-jae, who heads the interagency task force managing the initiative, stated, “We will ensure thorough preparations for the rollout of these payments so that they can serve as a catalyst for economic recovery by boosting consumption and supporting those in need.”
All citizens of South Korea as of June 18 will be eligible for a one-time payment of 150,000 won ($110). Payments will be distributed through credit or debit cards, prepaid cards, or gift certificates issued by local governments.
Additional assistance will be directed towards vulnerable populations. Households near the poverty line and single-parent families will receive 300,000 won ($220), while recipients of the basic living allowance will obtain 400,000 won ($290). Furthermore, individuals residing in rural areas will receive an extra 50,000 won to encourage “balanced regional development,” as stated by the Interior Ministry.
A second round of payments is scheduled from September 22 to October 31, which will allocate 100,000 won ($73) to the lowest 90% of income earners. Eligibility will be assessed based on national health insurance premiums, with further details to be disclosed in September.
South Korea, recognized as Asia’s fourth-largest economy, narrowly evaded a technical recession in 2024 as growth stagnated in the latter half of the year, following a decline in the second quarter and a sluggish recovery in the third. The economic decline has been largely linked to internal political turmoil, which reached a peak with the impeachment of then-President Yoon Suk Yeol on charges of insurrection following his brief declaration of martial law in December.
The newly inaugurated President Lee Jae-myung, who assumed office on June 4, has unveiled a stimulus initiative that encompasses cash support and digital vouchers, alongside a commitment to invest in AI infrastructure to foster economic growth.
Nevertheless, some economists have cautioned about potential inflationary consequences and long-term threats to fiscal stability, as the Finance Ministry intends to finance the stimulus efforts through additional debt, anticipating a fiscal deficit of 4.2% and national debt amounting to 49.1% of GDP.
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