Categories: CoronavirusFinance

South Korea approves extra $6.3 billion budget, helps families hit by pandemic

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The South Korean administration passed a new measure that will give middle-income and lower-income households another emergency relief worth 1 million won [US$814].

The Ministry of Economy and Finance announced on Thursday, April 16, an extra budget worth 7.6 trillion won to help eligible households alleviate the impact of the coronavirus crisis.

The budget is reportedly higher than the original plan, which was 7.1 trillion won.

Extra budget laid out for South Korea’s 14.7 million families

A day after South Korea President Moon Jae-in’s coalition won a parliamentary majority, the government proposed a new plan to distribute cash relief to 14.7 million households in forms of gift certificates, electronic cash, and shopping coupons.

The new measure targets to help households with four or more members—particularly those who earn below the 70% gross income—by offering cash aid worth US$814 [AU$1,280].

Eligible single-person, two-person, and three-person families will also receive help from the government.

For single-person households, they will receive 400,000 won. Two-person and three-person households, on the one hand, will receive 600,000 won and 800,000 won, respectively.

Finance Minister Hong Nam-ki promises that the South Korean government will mobilize all resources available and be decisive with their actions until the pandemic ends.

Additionally, the ministry clarified that they will not issue bonds to fund the program, but rather by readjusting this year’s annual budget.

He also said in his statement that the government will consider other measures and that more spending should be expected.

“We will continue to consider additional measures to support the resiliency of our economy. Fiscal spending has to play an active role as the last resort of our economy.”

The second budget came a month after the National Assembly approved an 11.7 trillion won supplementary budget, which is also said to be the highest amount allocated to keep the country moving as the pandemic continues to wreck the global economy.

South Korea’s economy to contract by 1.2%

Despite all the measures laid out today, the South Korean government still expects the pandemic to put a massive dent into its economy. It is particularly true that the country is export-reliant, and many of its trading partners are struggling to stay afloat as well.

The International Monetary Fund (IMF) said the country should expect its economy to shrink by 1.2% this year. South Korea’s economic growth last year was reportedly the slowest since 2009, with an increase of two percent only.

The country prepared plans last month to double the amount of emergency-financing aid package to 100 trillion to help hard-hit businesses as consumer demand slowed down, and the global economy is on halt.

Featured image courtesy of HeungSoon/Pixabay

Kari Astillero

Kari Astillero is a freelance digital content writer by profession and a poet by heart. She works at home trying to guard her solitude from the city's noise.

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Kari Astillero

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