S. Korea unveils $9.8b extra budget to boost consumption over COVID-19

SEOUL - South Korea unveiled 11.7 trillion won ($9.8 billion) worth of extra budget on Wednesday to boost private consumption over the soaring cases of the COVID-19 for the past two weeks.

The supplementary budget bill, set to be submitted to the National Assembly for approval on Thursday, came hours after the US Federal Reserve cut its target rate by 50 basis points in its first emergency move since the 2008 global financial crisis.

It was the country's biggest extra budget in seven years. When the Middle East Respiratory Syndrome (MERS) broke out here in 2015, a 11.6 trillion-won supplementary budget was approved.

As of Wednesday afternoon, the number of confirmed COVID-19 cases here topped 5,600. The majority of cases had been reported for the past two weeks.

Amid the fast virus spread, consumers here refrained from going for shopping or doing outside activity. It hit hard microbusiness owners in traditional markets and shopping complexes nationwide.

To bolster private consumption, about 3 trillion won was allocated to providing gift vouchers for low-income households and elders, and offering childcare subsidies as well as a tax refund on the purchase of energy-efficient home appliances.

Cheaper loans would be provided for small companies and microbusiness owners, while subsidies would be offered to businesses to help them maintain workforce.

Around 2.3 trillion won was earmarked for enhancing the quarantine system, compensating the loss of hospitals and offering the living cost of patients and those placed under quarantine.

The extra budget planned to be financed through 1.4 trillion won of leftover funds and 10.3 trillion won of issuance in government bonds.

The finance ministry said that if approved by the parliament, more than 75 percent of the budget would be executed for the next two months.