The South Korean government recently unveiled a new trillion won deal that will help revive and reshape their economy.
Refocus the Economy
The new deal has a value of 76 trillion won. This roughly equates to USD $62 billion. The government came up with this plan after the country was severely affected by the pandemic.
Due to the pandemic, the growth forecast of the country was reduced for the whole year.
This new plan was mentioned back in April. The goal of this new plan is to revive the economy by 2025. They will do this by refocusing on supporting the growth of jobs and on new industries.
The policy outlook for the second half states that this plan may be supported even further. More funds may come from an extra budget. It is currently being drafted.
The South Korean government understands that regrowth is a struggle. The new plan may see growth as low as 0.1 percent this year alone. This is the smallest growth since the Asian financial crisis in 1998.
The government admitted that during the planning phase, banks and experts were more optimistic about the growth rate. However, they do acknowledge the risk accompanying the new plan, especially if a second wave of the pandemic were to come.
South Korea is hurting from all sides. For starters, their economy is totally dependent on trade. Since the pandemic has international markets, it has hindered any actions.
Unfortunately, the pandemic has also spread locally. This means that fear has been growing with its citizens, crippling any hope for domestic gains and recovery.
Measures and Industries
Measures have already been announced to stop the country’s bleeding. A 250 trillion won measure has been set. This measure will help prop up the country’s economy. They’ll do this by the use of direct support, loans, and funds that will help to stabilize the market.
The difference between the old and new measures is a matter of focus. In the old measure, it was focused on helping out the economy until the pandemic ended.
The new plan will focus on creating more than 500,000 jobs by 2020. The plan is that included in these half a million jobs is that a fifth will consist of software programmers and artificial intelligence experts.
With the budget of 76 trillion won, more than 30 trillion will be used in the next two years. After President Moon Jae-in’s term, the remaining 40 plus trillion won will be used by 2025.
The plan will help promote fifth generation wireless networks and artificial intelligence usage across various industries and areas that are not that developed.
Apart from these, the plan will help companies who are working on green technologies. They hope that the progress can subsequently help out their manufacturing industries. If this happens, it may make the manufacturing industry in South Korea more energy efficient.
Another side of the plan will be to use the budget to retrain the skillsets of workers and wide the insurance coverage. This will expand it to universal coverage.