South Korea 'distributes money' to all citizens, each person receives up to 400,000 won to revive the economy
The South Korean government is launching a massive nationwide cash handout program, described as "consumption coupons," aimed at boosting domestic spending and reviving the sluggish economy.
The initiative is part of a 31.8 trillion won (about $23.3 billion) supplementary budget approved by the National Assembly on July 4. The program is scheduled to start on July 21 and last until September 12, the Korea Herald reported.
"We will make sure to thoroughly prepare for the rollout of these payments so that they can serve as a catalyst for economic recovery by boosting consumption and supporting those in need," said Vice Interior Minister Kim Min-jae, who heads the task force overseeing the initiative.
Under the plan, all residents of South Korea as of June 18 will receive a one-time payment of 150,000 won (about $110). The funds will be disbursed via credit cards, debit cards, prepaid cards or gift certificates issued by local governments.
In addition, vulnerable groups will receive additional support. Near-poor households and single-parent families will receive 300,000 won (about $220). Those receiving basic living allowances will receive 400,000 won (about $290). Those living in rural areas will receive an additional 50,000 won to promote “balanced regional development.”
A second round of payments, scheduled from September 22 to October 31, will provide 100,000 won (about $73) to the bottom 90 percent of income earners. Eligibility will be determined based on national health insurance premiums.
South Korea, Asia's fourth-largest economy, narrowly avoided a technical recession in 2024 as growth slowed in the second half of the year, blamed on domestic political turmoil that culminated in the impeachment of former President Yoon Suk-yeol after he briefly imposed martial law last December.
New President Lee Jae-myung, who took office on June 4, introduced the economic stimulus package as part of his pledge to boost growth.
However, some economists have warned of possible inflationary effects and long-term risks to South Korea's fiscal health, as the country's finance ministry plans to finance these stimulus measures through new debt issuance, which is expected to push the fiscal deficit to 4.2% and public debt to 49.1% of GDP.