To Stimulate Domestic Economy
The South Korean government will organize a nationwide sales event, as big as the Korea Sale Festa held in autumn, from June 26 to July 12 to stimulate the domestic economy, the Ministry of Economy and Finance said on May 28.
The plan is part of the government's economic policies for the second half, which were discussed at the 5th Meeting of the Central Economic Response Headquarters on May 28.
The ministerial meeting was presided over by Deputy Prime Minister Hong Nam-ki.
The ministry said discount events will take place across the country, starting from downtown, Seoul, to boost domestic demand. It will also promote dining out to increase private spending.
Ministers also discussed ways to provide extra support for industries that are hit hardest by the COVID-19 pandemic.
The industries to receive extra support are auto part suppliers, medium-sized shipbuilders, textile makers, exhibition businesses and sports service providers.
- Auto parts suppliers: 500 billion won worth of guarantees to be made available, which will be raised by car manufacturers, the government and local governments;
- Medium-sized shipbuilders: Government to order this year around 30 eco-friendly vessels to replace old public sector vessels and coast guard combat ship;
- Textile and clothing makers: Spend 90 percent of the public sector apparel procurement budget in the first half, such as budgets for police uniforms and firefighter uniforms, loans and guarantees taken out from government agencies, such as Korea SMEs and Startups Agency and Korea Technology Finance Corporation, to be expanded, and new guarantees to be provided through a special venture and startup guarantee program;
- Exhibition businesses: Give 600,000 won per booth for the exhibition suspended due to social distancing, and promote the use of local exhibition facilities for the nationwide sales event scheduled to start on June 26;
- Sports service providers: Provide extra loans worth 20 billion won, give a 30,000 won fitness center membership fee support to 400,000 individuals, provide infection control support when international competition events are held, and help create remote coaching markets.
Meanwhile, the government will soon announce its second-half economic policies and the 3rd supplementary budget proposal. The second-half policies will contain the following measures:
- Measures to boost domestic demand, including investment promoting measures
- Korea New Deal and other plans to prepare for a post COVID-19 economy
- Plans to boost exports, including support for the country’s infection control tools, the K infection control, to go overseas
With regard to exports, the government will announce in July measures to help exports recover, which will include support to boost overseas orders and plans to promote reshoring.
At the beginning of the meeting, DPM Hong talked about the improvement in confidence data in May.
Consumer confidence rose in May after falling for four months in a row. And non-manufacturing BSI improved, although manufacturing BSI is not picking up. Economic sentiment, which combines consumer sentiment and business confidence, rose slightly in May.
Hong expressed hope that the improvement, weak though, will lead to economic recovery.