Seoul packages $17 billion Covid-19 aid in first budgetary increase this year

[Photo by Yonhap]

South Korea is packaging 15 trillion won ($13 billion) in supplementary budget in just the third month into the new year plus 4.5 trillion won dug out of reserves to finance the fourth round of Covid-19 aid, of which nearly half would have to be raised through treasury issues on top of record debt supply planned for this year.

The government and the ruling Democratic Party of Korea agreed on the near 20 trillion won spending scheme, coincidentally timed with the April by-elections to vote mayors for the country¡¯s two most populated cities Seoul and Busan.

Under the relief outline to be put for ruling party-dominated National Assembly on Thursday, as many as 6.9 million merchants whose businesses were affected by the tough social restriction measures could receive a check of up to 5 million won.

The new package will be funded by a supplementary budget of 15 trillion won and 4.5 trillion won in reserve from this year¡¯s budget of 558 trillion won.

Once passed, the grants will roll out as early as the end of March.

Bars, singing rooms and gyms that were forced to close doors for entire January due to the tightened social distancing rules will be granted 5 million won. Those who were forced to shut down and then went under business restrictions will receive 4 million won, while those under full-month restrictions will pick up 3 million won. Small merchants whose revenue plunged 20 percent or more will be handed out 2 million won, and others 1 million won.

Electricity bills will also be eased by 600,000 won to 1.5 million won.

The handout would make the fourth since the outbreak of Covid-19. Of the latest spending, 9.9 trillion won will be in debt issues. National liabilities would be bumped up to 965.9 trillion won as the result. The debt to gross domestic product would rise to 48 percent from 47.3 percent estimated during budgeting for 2021. Government liabilities were stretched to 846.9 trillion won last year after four budgetary increases.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]