Korea likely to designate Oct. 2 as temporary holiday

Finance Minister Choo Kyung-ho said the government was positively considering the ruling party's proposal to designate Oct. 2 as a one-off public holiday to allow people to have six consecutive days off work.

"The ruling party made the suggestion to ensure the people's right to rest and to stimulate domestic consumption. The government agrees with the ruling party," Choo said in an interview held by a local broadcasting station Tuesday.

Designating a temporary holiday on Oct. 2 -- which falls between the Chuseok public holiday and National Foundation Day -- would create a six-day extended break.

The ruling People Power Party formally proposed the measure on Monday, explaining it could boost domestic consumption.

According to a report issued by the Hyundai Research Institute in 2020, the designation of a one-off public holiday can boost production by 4.2 trillion won ($3.1 billion) and induce added value worth 1.63 trillion won.

If the designation is made, it will be the first temporary holiday under the Yoon Suk-yeol administration. The government is likely to make a decision at the Cabinet meeting slated for next Tuesday.

In Tuesday's interview, Choo further elaborated on the budget proposal for 2024, approved by the Cabinet earlier in the day.

The 656.9 trillion won budget for next year, grew by the slowest rate increase since 2005, reflecting Korea’s falling tax revenue.

“We have tightened the belt on fiscal management with a 2.8 percent increase on the budget, one of the lowest increases in history,” Choo said, when asked about the government budget plan for 2024.

"It was about finding the balance between maintaining a sound fiscal status and using money where it needs to be spent," he said.

Choo underlined there would not be an expansionary fiscal policy next year.

“The tax revenue has been low. When there is less family income, one has to tighten the spending rather than taking out loans,” Choo said. “The worst policy is to encourage the economy by using public finance based on debts. It is the easiest, most irresponsible policy.”

When asked about snowballing household debt, Choo answered the government aimed to handle the matter over time. Household borrowing increased by 9.5 trillion won in the second quarter to 1,862.8 trillion won. It is the fastest quarterly growth since the fourth quarter of 2021.

“Household debt is a problem which has been accumulated over the years. If the (debt) is decreased at once, there will be consequences on the economy,” he said. “We will work on downsizing the debts, improving Korea's sovereign rating through time.”