South Korea announces $16.5 billion stimulus package
Monday, 03 02 2020, Category: Economy, Country: Asia
South Korea wants to cushion the consequences of the coronavirus for Asia’s fourth largest economy with an economic stimulus package.
Finance Minister Hong Nam Ki announced on Friday measures worth in excess of 20 trillion won ($16.5 billion), though he did not give an exact figure.
The amount includes an already planned budget supplement that will be introduced in parliament next week, a spokeswoman for the Finance Ministry said.
According to the draft, it would far exceed the 6.2-trillion-won budget that South Korea allocated during the outbreak of the respiratory disease MERS five years ago.
It is hoped the measures will help limit the extent of damage caused by the spread of the coronavirus and strengthen economic momentum,Hong said.
Economic activity and confidence have been hit hard by the coronavirus outbreak in South Korea, which has reported the highest number of cases of the disease outside China. By Friday, the number of those infected had risen to more than 2,300.
Among other things, aid of 9 trillion won is now being provided by financial institutions for companies that are suffering losses inturnover due to the outbreak.
Low-interest loans for small and medium-sized companies are also being made available.
The government also plans to distribute shopping vouchers for private households to stimulate demand.
The governor of South Korea’s central bank, Lee Ju Yeol, warned on Thursday that the country’s economy could shrink in the first quarter.
The Bank of Korea has corrected its growth forecast for this year from 2.3 to 2.1 per cent.
Among other things, private consumption is expected to collapse in the short term due to the Covid-19 outbreak, the bank said.
Source: Oman Observer