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“Now is the golden time for an economic rebound. I hope that the (consumer) policy, which has been kept for quarantine, will be prepared and implemented immediately. ”
President Moon Jae-in ordered an all-out war to save consumption. While presiding over a meeting of the boss and aides of the Blue House on the 19th.
President Moon Jae-in is speaking at a meeting of chiefs and advisers held at the Blue House on the afternoon of the 19th. Blue House photo reporters
President Moon said: “It is necessary to resume paying consumer coupons while looking at the quarantine situation and promoting various projects to boost consumption. We hope that the mitigation measures implemented since last week will be an important opportunity to increase consumption and economic vitality. Said. It is an order to hurry to resume the policy of support for discounts and events by sector such as restaurants, tourism and culture, as well as the eight large consumer coupons that were stopped due to the reproliferation of the contagion of the new coronavirus (Corona 19) in August.
Vice Prime Minister Hong Nam-ki and the Minister of Strategy and Finance are speaking at the 18th Meeting of the Emergency Economy Countermeasures Headquarters held at the Seoul Government Complex in Jongno-gu, Seoul on the 16th. News 1
President Moon’s direct emphasis on stimulating the economy through consumption stems from the rapid deterioration of recent economic indicators. Vice Premier Hong Nam-ki and the Minister of Strategy and Finance said at a meeting of the Countermeasures Headquarters for the Emergency Economy on 16: “Unlike in the past, the crown crisis is affecting the service industry. with a high employment generation effect. He said. The government believes that the order of ‘support expansion of consumption → recovery of domestic demand → increase in employment’ should be rushed.
However, there are criticisms that the government’s perception of the situation itself is incorrect. This is because economic conditions are very different from June-August, when Corona 19 expanded and declined. At that time, the fear of the reproliferation and prolongation of Corona 19 was less than now. There was also the first nationwide disaster relief fund, which was paid from 400,000 to 1 million won per household. Although there was criticism of the ‘Korean subsidy on beef and glasses’, it was effective in saving consumption in the short term.
Now it is different. Corona 19 was confirmed to be able to proliferate again at any time during the Liberation Day holiday in August. This is the reason why people cannot easily increase consumption when faced with it. As the development of vaccines and treatments has been delayed, fears of prolonged COVID-19 have increased. The main targets include small business owners whose clients have disappeared even though the secondary disaster support fund has been paid, workers of a special type (special baccalaureate) and freelancers whose sales have fallen dramatically, young people without work and unemployed. There is a limit that has caused an increase in consumption due to its high life support.
The jobs crisis is deteriorating. In September, 392,000 jobs disappeared from the Employment Trend of the National Statistical Office (compared to the previous year). It has returned to the situation before May, when Corona 19 was first extended. The number of temporary, daily and self-employed workers continued to decline dramatically and, in particular, the number of permanent workers increased to only 96,000. It is the lowest since 1999 (170,000 people) in September of each year. This means that Corona 19’s employment crisis has started to spread from temporary workers, self-employed workers, to relatively safe regular jobs.
Changes in the number of employed and unemployed. Graphic = Kim Hyun-seo [email protected]
Here, the government’s real estate countermeasures repeatedly resulted in monthly rent and jeon problems. In a situation where jobs are unstable and it is difficult to find a place to live right away, the government’s slogan of “increase consumption” cannot work.
This atmosphere is also confirmed by statistics. According to the results of the ‘Automated Consumer Survey’ released by the Bank of Korea, the Consumer Sentiment Index (CCSI) for September was 79.4, which was at the level of March (78.4) at the beginning of the spread Corona 19. A value less than 100 means that consumer confidence is worse. It fell 8.8 points in a month, but most of the decline was the forecast for consumer spending (-2.6 points). This means that there were so many responses that they would cut back, not just for eating out and traveling, but also for health and medical expenses.
This is the presidential message going backwards with the family environment trying to reduce the crisis and tighten their belts. Ha Jun-kyung, an economics professor at Hanyang University, said: “If you use the above consumer stimulus, the number of confirmed patients has also increased.” “(The increase in consumption) is a policy that still has risks (risk), so it is correct to expand the policy while observing the Corona 19 trend. I emphasized.
Some point out that support measures to reactivate domestic demand can generate uncertainty in the private economy. Ahn Dong-hyun, a professor in the Department of Economics at Seoul National University, said: “We can increase employment and fixed-cost expenses in relevant workplaces thanks to internal support measures. It may be possible ”, he diagnosed. He criticized: “The government only thinks of stimulating consumption and ignores this uncertainty.”
It is also noted that government measures to boost consumption, as in August, may lead to the reproliferation of Corona 19 in a situation where the Christmas, New Year’s Eve and holiday seasons overlap with the winter cold. As a result, it is argued that prioritizing quarantine is beneficial to the economy. Kim Woo-joo, professor of infectious medicine at Korea University Guro Hospital, said, “The situation and now feels like a debut in late July and early August.” As resolved, it acted as a risk factor and in August the number of confirmed cases was recorded ”. Professor Kim said: “Now, the number of confirmed cases is more than a day than in late July, and the weather is colder than in early August, which is summer, so the survival period of the virus It is longer”. It can act as a hardship. ”
Sejong = Reporter Hyunsook Jo and Seongbin Lim [email protected]
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