S. Korea to inject extra W4tr into COVID-19 relief

Seeking to cushion the fallout from the COVID-19 resurgence, South Korea’s government vowed Thursday to spend an additional 4 trillion won ($3.62 billion) by ensuring that local governments across the nation don’t hold back on spending.

It also decided to expand the range of usage for its state-distributed dining coupons, seeking to include food delivery applications that are facing soaring demand due to the social distancing restrictions.

“(The government) will continue to operate the dining coupon system within restrictive category so that the payment may be fully resumed as soon as the quarantine measures are alleviated,” said Deputy Prime Minister and Finance Minister Hong Nam-ki in an economic policy meeting held at Seoul Government Complex.

Accordingly, the authorities will seek to issue dining coupons that can be used in non-face-to-face transactions, including orders through food delivery apps.

Earlier this week, the country raised its social distancing level in the Seoul metropolitan area by one notch to Level 2, with Level 3 being the highest.

Under these rules, facilities classified as high-risk are obligated to suspend business, while special-purpose businesses such as wedding and funeral halls are to limit the number of visitors to 100.

Cafes may only offer takeout and delivery services, and restaurants are banned from serving food on their premises after 9 p.m.

The government, which had previously committed itself to the task of revitalizing domestic markets, was consequently forced to scale down or suspend its coupon program.

“(But) we will keep operating the series of actions to revive the domestic market, by turning key sale events to online ones,” Hong said.

The chief policymaker also vowed to allocate an additional fiscal injection worth 4 trillion won by reducing unspent funds in the budgets of the central and local governments.

“It is our goal to achieve the highest-ever budget execution rate (this year),” the minister said.

Addressing the Korean New Deal -- the Korean government’s midterm stimulus package -- Hong said the government will expand the designation of special economic zones that are devoted to the Digital New Deal and the Green New Deal.

Those doing business in these designated special zones will receive comprehensive support in investment, research and development, exports, and human resources, in line with the government’s goal to select 100 promising companies and to nurture them into champions by 2022.

“I feel sorry that social distancing had to be reinforced at a time when our economy was about to rebound at last to the pre-coronavirus level,” Hong said.

Asia’s fourth-largest economy saw its consumer sentiment index improve to 97.7 points, up from 91.6 points a month earlier. The business sentiment index also jumped to 85 points, up 6 points during the same period.

“However, quarantine is the best vaccine for our economy now,” Hong said, urging cooperation.

By Bae Hyunjung (tellme@heraldcorp.com)