Since the Sewol-ho ferry accident on April 16th, the finance ministry says a growing number of Koreans have stopped eating out, traveling, and engaging in various leisure activities.
The sales growth of restaurants dropped five percentage points following the accident, and reservation cancellations have resulted in more than 30 million U.S. dollars in losses for the tourism industry.
This, coupled with unstable markets and the exchange rate, prompted President Park Geun-hye to address the issue with ministers and businessmen on Friday.
"We as a nation are facing a very difficult situation. At a time of such crises, the government must actively look after the livelihoods of the Korean people."
Stressing how crucial it is to steady the recent economic recovery, the president called for measures to soothe weak sentiment.
She then asked officials to offer much-needed support for the country's small- and mid-sized businesses and the self-employed affected by the current crisis.
To that end, the government will increase its second quarter spending by over seven billion dollars and offer affected businesses a total of some 70 million dollars in financing at low interest rates.
The businesses will also be allowed a grace period on their taxes.
To help the people and businesses gradually resume normal business activities, the president said the government will have to come to some determinations about the Sewol-ho ferry accident.
"To prevent a repeat of a similar disaster, the government will make right the irregularities behind it, and publicize in detail how those found responsible will be punished."
"President Park also mentioned her deregulation drive, saying efforts to root out unnecessary red tape must continue, while at the same time bolstering regulations related to safety, consumer protection and fair competition.
Choi You-sun, Arirang News."