For more on what was announced today, our correspondent Lee Soo-jin is joining us in the studio.
So Soo-jin, other than the corporate support plan that we just saw, what does the government say when it comes to its most recent projections about the economy?
In short, it’s quite positive across the board.
The government releases its economic policy direction based on revised economic projections for economic growth, inflation, employment, and current account balance.
On Wednesday, the Finance Ministry announced its economic policy direction for the latter half of the year where it revised its economic growth projection for 2024 from 2-point-2 percent to 2-point-6 percent.
This upward revision was mostly due to a strong growth forecast for exports thanks to increased demand for AI as well as semiconductors.
And the inflation rate is expected to ease to 2-point-6 percent.
This comes as data from Statistics Korea on Tuesday showed that the country’s consumer price index – a key gauge of inflation – rose by 2-point-4 percent in June compared to the same month the year before.
This is the lowest figure seen in 11 months – inching closer to the target inflation at two percent.
As for employment, the government projects that as the economy shows signs of recovery, it’ll go up more than 60 percent on-year.
And this year South Korea is expected to see a current account surplus of 63 billion dollars as exports continue to recover.
Let’s take a listen to what the president said about the current state of the economy.
So, despite the positive outlook, there are still areas of concern. What are other focuses?
Well, this time the focus is on vulnerable groups.
The government said that while the newly revised projections for the second half are promising, vulnerable groups have yet to feel that the economy is getting better.
Here’s what the Finance Minister said on this.
“But because the recovery speed varies across sectors due to high inflation and interest rates, small business owners still feel that the economy is struggling.”
To help small business owners, the government will spend 25 trillion won, or nearly 18 billion U.S. dollars, to provide financial support, business growth, and recovery opportunities as well as a “one-stop platform” that allows them to more easily access necessary information.
This includes an extension of government loan maturity, which according to an expert, will prove to be the most helpful.
Let’s take a listen.
“I think the most effective way is postponing interest rate payments to banks. In terms of the moral hazard problem, it is very difficult to decrease the size of money borrowed from banks but instead, there is small room for banks and medium and small sized businesses to delay interest rate payment.”
And the government plans to raise the upper annual revenue limit for businesses to receive electricity bill subsidies from around 21-thousand dollars to around 43-thousand dollars.
The government will also help small business owners expand digitally to accelerate their growth.
By the end of this year, there will be nearly 60 traditional markets where products are also available online.
As for measures to help business owners get back on their feet,.. it plans to offer monetary incentives each month for small business owners that were forced to close, to attend reemployment programs or to start new businesses.
Lastly, it plans to create a one-stop platform where small business owners can find important information regarding their finances, employment, and businesses in one place, with the finalized version to be in operation by January next year.
Are there any measures directed towards maintaining the trend of getting prices under control?
The government plans to remain vigilant, which is evident by how much it’s planning to spend to stabilize prices.
The support measures to get prices under control in the second half of the year amount to 4 billion dollars.
This includes implementing tariff quota rates for 51 items such as vegetables and fruits which will allow for lower tariff rates on imports of products within a certain quantity, as well as expanding contract farming of fruits and developing more gim farms.
Here’s why these continued efforts to tame inflation are necessary.
“The general citizens in Korea do not feel that the economy is getting better these days because the inflation is higher than their wage increases. But as inflation stabilizes by the end of this year I think Korean people will see that the economic situation gets better. Prices of agricultural products have pretty much stabilized from last month.
So with these pan-governmental efforts, people will hopefully soon be able to feel that the economy is, in fact, getting better and that it’s not just the data.
Alright, thank you for the report today, Soo-jin.
Thank you for having me.
Source : Arirang TV, https://www.arirang.com/news/view?id=272793
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