S. Korea to continue financial aid for cash-strapped small biz amid COVID-19 resurgence

In response to a deepening economic slump due to the recent resurgence of COVID-19 cases, South Korea on Thursday said it will keep providing financial lifelines for coronavirus-hit small business owners.

“Due to a second wave of the coronavirus pandemic, a growing number of small business owners are likely to be in need of cash despite the government’s initial support programs,” Kim Yong-beom, first vice minister of finance, said in a meeting with related officials held at Seoul Government Complex.

“(The Korean government) will continue offering active financial support through the ongoing second financial support package that still has enough funds to subsidize small-business operators,” Kim said. 

Since kicking off on May 18, the second loan program has provided funds to nearly 60,000 cash-strapped small merchants as of Wednesday, according to Kim.

To cushion the COVID-19 impact on the real economy, the government had given out loans worth 16.4 trillion won ($13.8 billion) in March followed by additional 10-trillion worth loans in May. The amount of loans taken out by virus-hit borrowers stood at more than 14 trillion won as of this month, officials said. 

Calling for stronger containment measures in the midst of a second COVID-19 wave, Kim vowed to keep a balance between strict quarantine activities and reviving the real economy. 

“The authorities are mulling over policy drives to counter the virus resurgence, while avoiding excessive lockdown measures that will hamper economic activities,” Kim said.

He also pointed to a recent surge in prices of agricultural products mainly due to the country‘s longest-ever monsoon season. In July, the country’s producer prices shot up for the second straight month fueled by a 6 percent on-month increase in the price of agricultural products, according to the Bank of Korea. 

“As manufacturing and shipments of agricultural products recently resumed, wholesale prices saw a downward trend, but compared with the previous year, the prices of agricultural products turned out to be much higher. Some vegetable crops’ prices will probably remain high for a certain period of time considering their time-consuming growing process as well as crop period,” Kim added.

“(The Finance Ministry) will continue to support production of agricultural products by offering pest control services or discounts on pesticides and ramp up monitoring supply chain of agricultural products as well as their price movements in order to ensure enough stock of such popular groceries or fruits like apples or pears before the forthcoming Thanksgiving Day.”

By Choi Jae-hee (cjh@heraldcorp.com)