Gov't to release record amount of Chuseok staple food reserves ahead of holiday

The government will release a record amount of reserves of Korean holiday food staples to keep prices low in a bid to drive up consumption.

Gift sets for the Chuseok harvest festival holiday are displayed at a discount mart in Seoul for pre-order on Aug. 25. [YONHAP]

The government will supply a record amount of reserves of Korean holiday staple foods, aiming to keep the prices below pre-pandemic levels as part of its broader plan to shore up livelihoods and pump up spending ahead of the Chuseok holiday.

The announcement by the Ministry of Economy and Finance came on Wednesday as Korea continues to grapple with stubbornly sluggish domestic demand.

“The economy has been on a recovery driven by exports, with consumer prices stabilizing in general,” noted Finance Minister Choi Sang-mok in his opening remarks during an economic ministerial meeting held at the government complex in central Seoul on Wednesday.

“However, prices of high-demand items during the Chuseok holiday season are soaring due to the heat wave and the recovery of domestic demand has been relatively slow, continuing to strain everyday livelihoods and consumer sentiment,” said Choi.

Finance Minister Choi Sang-mok speaks during an economic ministerial meeting held at the government complex in central Seoul on Wednesday. [MINISTRY OF ECONOMY AND FINANCE]

Under the latest plan, the government will supply 170,000 tons of 20 high-demand staple food products for the holiday season, which runs from Sept. 14 to 18 this year.

A record 12,000 tons of napa cabbages and white radishes will be released to the market to bring down prices, while the supply of apples and pears will be tripled. The supply of beef and pork will be increased by 40 percent compared to the usual amount.

The reduced tariff rates imposed on imported fruits, which were originally set to expire in September, will be extended until the end of the year.

Moreover, the ministry will funnel 70 billion won ($52.4 million) to support discounts of up to 60 percent for popular items on online and offline markets, in cooperation with farmers and distributors.

The goal is to keep the prices below 2021 levels, which is before the surge of post-pandemic inflation. Korea's inflation, which was 2.5 percent in 2021, rose steeply to 5.1 percent in 2022 and 3.6 percent last year.

The previously announced visa policy to allow non-Korean restaurants to hire foreign workers on an E-9 visa will be implemented ahead of the Chuseok holiday.

The government also allotted 43 trillion won to provide loans and credit guarantees under a financial support program for small businesses. The interest rates of loans provided to sellers affected by the liquidity crisis at e-commerce platforms TMON and WeMakePrice will be lowered to 2.5 percent from the current 3.4 to 3.5 percent.

To address the sluggish domestic demand, state-backed agencies will speed up the execution of construction investments worth 5 trillion won in total, while regional governments will inject 6.5 trillion won. Moreover, to drive domestic tourism during the five-day holiday, 500,000 discount vouchers for accommodation outside the greater Seoul area will be issued.

During the ministerial meeting, regulative measures following the 1.3 trillion won payout delay at TMON and WeMakePrice were discussed as well. The government is considering pushing for a revision of the large retail business law to regulate settlement durations for online marketplaces.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]