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South Korea unveils US$12 billion extra budget to cushion impact of extended COVID-19 curbs

South Korea unveils US$12 billion extra budget to cushion impact of extended COVID-19 curbs

File photo. A South Korea won note is seen in this illustration photo. (Photo: Reuters/Thomas White)

SEOUL: South Korea unveiled a 14 trillion won (US$11.75 billion) supplementary budget on Friday (Jan 21) to support the self-employed and small businesses that have taken a heavy hit from extended COVID-19 curbs.

About 11.5 trillion won will be used to help small business owners and compensate their losses caused by the extension of virus-related measures, the finance ministry said.

Another 1.5 trillion won is earmarked to secure COVID-19 treatment pills for 400,000 people and 25,000 hospital beds.

The other 1 trillion won will be used as contingency reserves should the Omicron coronavirus variant spread further and require more support.

To finance the extra stimulus, the government will issue 11.3 trillion won worth of treasury bonds and utilise 2.7 trillion won from public fund reserves.

The extra budget, which will be submitted to parliament on Monday, comes at a time when the ruling Democratic Party is struggling to recover public support just weeks ahead of the country's 2022 presidential election.

With the latest supplementary budget, the total government spending would increase to a record 621.7 trillion won this year, adding to the already approved 607.7 trillion won budget.

That would be an 11.4 per cent increase from the 2021 original budget, while it is also expected to bring the ratio of government debt to gross domestic product to a record 50.1 per cent.

South Korea extended its tougher social distancing rules for three more weeks, including 9pm curfew for restaurants, cafes and bars and limited size of private gatherings, amid concerns over a looming wave of the highly contagious Omicron variant especially ahead of the Lunar New Year holidays.

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Source: Reuters/aj

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