South Korea to distribute vouchers in stimulus plan

Starting as early as next month, about 90 percent of South Koreans will receive at least 250,000 won, or approximately $180, in government-issued consumer vouchers designed to boost domestic spending. The top 10 percent of income earners will receive no less than 150,000 won, and residents in rural areas will get an additional 20,000 won. In an effort to counter prolonged sluggish consumption and mounting political uncertainty, the government plans to inject 20.2 trillion won in fresh public funds to stimulate demand.

On Wednesday, the Cabinet approved a supplementary budget proposal spearheaded by President Lee Jae-myung. The plan provides financial aid to vulnerable groups, including small business owners, low-income workers, and young people, and calls for a nationwide distribution of consumer vouchers.

If the proposal passes the National Assembly, all citizens, including newborns and minors, will be eligible to receive vouchers. Amounts will range from 150,000 to 500,000 won depending on income. For example, a middle-class family of four would receive 250,000 won per person, totaling 1 million won. The vouchers can be used like cash at restaurants, supermarkets, and other physical stores. However, they may be restricted at entertainment venues and major online platforms such as Coupang and Baedal Minjok.

The administration’s decision to unveil a 20 trillion won stimulus package just two weeks after taking office highlights growing concerns about the domestic economy. With growth forecasts near zero, the government aims to boost household spending and revive consumer activity in local markets.

The plan also calls for raising the discount rate on regional gift certificates to as high as 15 percent. Additionally, 77.8 billion won worth of discount coupons for lodging, movies, and other leisure activities will be distributed. The government will increase infrastructure investment in railways and ports and buy unsold housing units to stimulate the construction sector.

"This is the time for the government to act," President Lee said. "The downturn is too severe for the market to recover on its own. I believe we may need to increase the supplementary budget even further."

“Since the declaration of martial law on December 3 last year, consumer sentiment has collapsed. Even the few remaining customers have disappeared,” Lee said. “Businesses are struggling. Although conditions have recently started to improve, the hardship faced by ordinary citizens remains severe.”

The government also lowered its national tax revenue forecast by more than 10 trillion won, expecting this year’s collections to fall short of original estimates.


세종=송혜미 기자 1am@donga.com