Support to Prop Up S. Korean Economy in COVID-19 Era
Updated: 2020-05-21 15:09:50 KST
Eight in ten South Korean households have received emergency disaster relief money paid out by the government to cope with the economic impact of the coronavirus pandemic.
Since South Korea began handing out spending money in the form of credit card points and gift vouchers on May 4th, 84-percent of the nation's 21.7 million households have claimed a total 9.4 billion U.S. dollars.
But, that's not all. Various financial support measures are being drawn up to prop up the local economy.
COVID-19 economic relief: It's the topic of our News In-Depth with Yang Junsok, Professor of Economics at the Catholic University of Korea.
The South Korean government has been providing different kinds of COVID-19 Emergency Disaster Relief Funds both at the national and regional level.
These plans were drawn up rather quickly with the spread of the Coronavirus.
But we already have banks offering secondary low-interest loans for those that hadn't applied first time around.
With the end of COVID-19 not quite in sight, do you think there will be another round of these government relief funds - perhaps in the second half of the year or next year? To what extent would this be plausible?
President Moon has emphasized that he would do all that it takes to keep our economy afloat, especially for the small and medium sized businesses.
What else could the government be doing to keep firms up and running?
Finance Minister Hong Nam-ki pledged to set up a fund worth 32.5 billion U.S. dollars to provide financial support to key industries impacted by the pandemic, specifically focused on aviation, oil refinery, and shipping.
Help us understand the scope of this financial support?
Looking at it in the bigger picture, does it affect the Korean economy in the days to come?
The finance ministry is also stepping up efforts to address the dismal job numbers.
It's creating jobs in the public sector by spending roughly 2.8 billion dollars in the coming months.
These job creation in the public sector are greeted by some but also criticized by many. Your thoughts, Dr. Yang?
The South Korean government and the central bank are setting up an 8.2 billion dollar special purpose vehicle to directly purchase commercial paper in efforts to calm a local debt market hammered by the COVID-19 pandemic.
The SPV would buy subprime debt as well as bonds with high credit ratings for six months AND low credit debt which were recently downgraded as a result of the COVID-19 shock.
This is a rare move by the Bank of Korea, isn't it? What does this mean? Help us understand.
It makes us wonder what happens after we've spent all this unanticipated extra budget? Won't this swell up government debt? How will the country deal with that?
As the entire world battles COVID-19, its economic fallout is very much global, as well.
The South Korean government has time and time again said it would boost measures to help the nation's economy recover more swiftly from the pandemic than others.
How is South Korea doing so far? How does the recovery of Asia's fourth largest economy compare to that of others?
Experts in all departments are working to face a NEW era, mid- and post- COVID-19.
At this point, what can serve as a base case study for economics experts?
Can we compare the COVID-19 impacted economy to the times of the 2008 financial crisis, the Asian financial crisis of the late 90s or the Great Depression?
How do you project South Korean economy to recover? Will it be a V-shaped, U-shaped or a Nike swoosh shaped recovery?
Yang Junsok, Professor of Economics at the Catholic University of Korea. Many thanks as always for your insights this evening. We appreciate it.