The target of the disaster relief payment has not yet been determined. While passports demand universal support for all citizens, the government is sticking to a position of selective support. Discussions on the size of the cashback business and subsidies for damage such as small businesses are also ongoing.
There is hope for economic recovery, but… Admission difference for universal and selective support
According to the government and the National Assembly on the 26th, the government is planning to announce the lower Gyeongbang in next week. The Hagyeongbang contains economic forecasts for this year and next year and major economic measures in the second half of this year.
The Democratic Party of Korea and the government held a meeting with the party on the 25th and agreed to mobilize all capabilities in consideration of the economic conditions caused by Corona 19.
Ho-jung Yun, floor leader of the Democratic Party of Korea, said on the same day, “It is nothing like a formula that domestic demand will recover only when income is stagnant due to COVID-19. We are preparing,” he introduced.
Hong Nam-ki, Deputy Prime Minister and Minister of Strategy and Finance, said, “The second half of this year is a time to return to normal life with a complete economic recovery after the coronavirus, and we are reviewing tasks in three directions. We will come up with a policy that will lead to a warm recovery.”
Deputy Prime Minister Hong also emphasized, “We will focus on preparing the second supplementary budget that we are reviewing together in order to increase the perception of the policy in the second half of the year.
The size of the second supplementary budget is expected to be set at more than 30 trillion won, an all-time high. Deputy Prime Minister Hong attended the National Assembly on the 23rd and said, “We are preparing an additional budget within the range of excess tax revenue.” He said, “I think the size of the additional budget will be around 30 trillion won.”
The key is whether the disaster aid is universal or selective. The ruling party’s demand for disaster aid to all citizens is high.
“The National Disaster Support Package is a comprehensive measure to revitalize domestic demand, and it combines loss compensation damage support, national cash support, and win-win consumption support,” said Yoon, floor leader of the National Assembly. “I want to call this method a universal support system for all people.” explained.
It is also clear that the government is opposed to the National Disaster Relief Fund, which supports even the high-income class. Deputy Prime Minister Hong said at the National Assembly on the 23rd that “the government is not thinking about the national disaster relief fund.”
At the National Assembly Planning and Finance Committee held on the 25th, Deputy Prime Minister Hong said, “It is inappropriate to provide subsidies to the highest income and wealth class due to various economic and financial conditions. emphasized.
When a ruling party member pointed out that the national subsidy is the same as the controversy over free meals, he countered, “Children’s meal expenses and the national subsidy are not on the same level.”
Deputy Prime Minister Hong explained that the second supplementary budget project, such as cashback, has the effect of supporting the entire nation. He emphasized, “We are designing as much as possible so that virtually all people can receive support from the people’s subsidies, damage subsidies that provide thick support for small business owners, and credit card cash back,” he said.
Announcement of industrial activity and price trend… Game Flow Diagnosis
In the context of a faster-than-expected economic recovery in the first half of this year, the National Statistical Office will announce industrial activity trends on the 30th of this year.
According to the April industrial activity trend, all industrial production increased for five consecutive months from the previous month until March, but fell by 1.1% in April and took a breather. Production in the mining industry decreased 1.6% due to a decrease in semiconductors, while the service industry increased by 0.4% as wholesale and retail (0.8%) and lodging/restaurants (3.1%) increased.
As exports have recently been brisk and domestic demand is recovering due to the easing of social distancing measures, all industrial production in May is also expected to recover. According to the Ministry of Trade, Industry and Energy, Korea’s exports in May amounted to $5073 million, up 45.6% from the same month last year. It is the first time in history that the growth rate of 40% for two consecutive months followed the previous month (41.2%).
Retail sales rose 2.3%, continuing the increase for the second month in a row. With the recent prolonged COVID-19 outbreak, the phenomenon of ‘retaliatory consumption’ is emerging, and retail sales growth is expected to continue. The cyclical variability of the coincident composite index, which shows the current economic situation, and the cyclical variability of the leading composite index, which shows the future economic outlook, rose for three consecutive months until April.
On the 2nd of next month, the consumer price trend for June will be announced. As inflation continues to rise, concerns about inflation are growing. The consumer price index in May rose 2.6% from the same month a year earlier, showing a 2% increase for the second month in a row. The increase itself was the largest in 9 years and 1 month since April 2012 (2.6%).
It is highly likely that the 2% inflation trend will continue for the time being. In the Monetary and Credit Policy Report released on the 10th, the Bank of Korea predicted that the inflation rate in April-May will increase and exceed the inflation target of 2% in the second quarter.
At a macroeconomic and finance meeting on the 1st, Vice Minister of Strategy and Finance Lee Won Lee said at a macroeconomic and finance meeting on the 1st, “The base effect from last year’s low prices due to Corona 19 is added to supply-side factors such as oil prices and livestock and fishery products. high,” he predicted.
Strong inflation is expected to raise concerns about inflation and increase pressure to raise the key interest rate. At a press conference on the 24th, Governor Lee Ju-yeol of the Bank of Korea hinted at raising the base rate by the end of the year, saying, “I think it is not too late to start normalizing monetary policy within the year.”
The following are the weekly schedules and reporting plans of the Ministry of Strategy and Finance, Statistics Korea, Korea Development Institute (KDI), Institute for Foreign Economic Policy (KIEP), and Institute for Taxation and Finance (KIPF).
◇Weekly main schedule
△ 28th (Mon)
14:00 National Assembly Legislation and Judiciary Committee (2nd Vice Minister, National Assembly)
16:00 Joint briefing of related ministries (Deputy Prime Minister, Seoul Government Complex)
17:40 Yonhap News TV News Watch (Deputy Prime Minister, Yonhap News TV)
18:00 KBS 2TV Integrated Newsroom ET (1st Vice Minister, KBS)
△ 29th (Tuesday)
10:00 Cabinet meeting (1st Vice Minister, Seoul Government Complex)
16:00 Field meeting in the field of defense (Second Vice Minister, Army Nonsan Training Center)
△30 days (Wednesday)
07:30 Real Estate Market Inspection Ministerial Meeting (Deputy Prime Minister, Seoul Government Complex)
08:30 Central Disaster and Safety Countermeasures Headquarters Meeting (1st Vice Minister, Seoul Government Complex)
10:00 Financial Project Evaluation Committee (Second Vice Minister, Undisclosed)
△July 1 (Thursday)
07:30 Innovation Growth BIG3 Promotion Meeting (Deputy Prime Minister, Seoul Government Complex)
09:00 State affairs inspection and coordination meeting (Deputy Prime Minister, Seoul Government Complex)
13:40 Special Regulatory Free Zone Committee (1st Vice Minister, Gunsan, Jeollabuk-do)
16:00 Field meeting in the field of jobs and employment (Second Vice Minister, undisclosed)
18:30 Meeting with the French Finance Minister (Deputy Prime Minister, closed)
21:00 KBS News 9 (Deputy Prime Minister, KBS)
△ 2nd (Fri)
08:00 Innovation Growth Inspection Meeting and Corona Policy Inspection Meeting and Korean Version New Deal Inspection TF (1st Vice Minister, Seoul Government Complex)
10:00 Happy Empathy Volunteer Corps inauguration ceremony and volunteer activities (Second Vice Minister, Seoul)
14:00 Korea Social Economy Expo Opening Ceremony (Deputy Prime Minister, Gwangju Metropolitan City)
15:00 Public Institution Steering Committee (Second Vice Minister, Undisclosed)
◇Weekly reporting plan
△ 28th (Mon)
09:30 Japan’s Economic and Fiscal Policy Direction and Implications for 2021
10:00 Publication of the booklet
12:00 Results of the 2021 barley, spring potato, apple and pear cultivation area survey
△ 29th (Tuesday)
06:00 Published June 2021 issue of Financial Forum
09:00 Economic Impact and Implications of the Integration of the Service Market in ASEAN
10:00 Agricultural statistics online training for Algeria
10:00 Revision of the enforcement ordinance of the National Contract Act and extension of special cases for contracting Corona
12:00 2019 Job Administration Statistics Sole Entrepreneur (Company) Debt
12:00 KOSTAT Statistical Plus Summer 2021 Issue Published
12:00 KDI Hosts Inclusive Korea 2021 International Conference – The Moon Jae-in Government’s Four-Year Journey: Inclusive Recovery and Leap –
15:30 Ministry of Strategy and Finance held a non-face-to-face Korean economic briefing session for investors in New York and London
△30 days (Wednesday)
08:00 Industrial activity trend in May 2021
09:00 May 2021 industrial activity trend and evaluation
10:00 Implications of the Peruvian Presidential Election Results and Prospects for the New Government
12:00 KDI North Korea Economic Review (Jun. 2021)
15:00 3rd Korea Social Economy Expo held
15:00 Korean New Deal Major Project Promotion Plan (July)
△July 1 (Thursday)
06:00 Tax and Finance Brief Vol. 110 Published
10:00 Main contents and implications of the G7 summit in 2021
△ 2nd (Fri)
08:30 Held an innovative growth strategy review meeting, policy review meeting, and Korean version new deal inspection TF meeting
08:00 June 2021 Consumer Price Trend
08:00 Conducted reorganization of consumer price survey as of 2020
09:00 June ’21 Consumer Price Trend
10:00 Lottery Committee launches the 14th Happy Empathy Volunteer Corps and conducts 1st volunteer activities
10:00 Characteristics and implications of Japan’s semiconductor strategy
15:00 ’21. Jul Treasury Securities Issuance Plan