Vice Minister Ki Jae: "All Policies Including Supplementary Budget Under Review Amid Severe COVID-19 Stage" (Comprehensive)

Central Government Contingency Fund of 104.1 Billion KRW and Local Governments' Contingency Funds and Funds of Approximately 108.2 Billion KRW to Be Expedited

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Kim Yong-beom, First Vice Minister of the Ministry of Economy and Finance, stated on the 24th that regarding the government's supplementary budget (supplementary budget) formulation, "As the crisis alert level for responding to the novel coronavirus infection (COVID-19) has been raised to the serious stage, all ministries are reviewing every policy to minimize the economic impact."

Vice Minister Kim made these remarks after attending the expanded macroeconomic financial meeting held at the Bankers Hall in Myeongdong, Seoul.

He explained, "The President mentioned that bold and extraordinary measures are necessary," adding, "We will provide sufficient available fiscal support to ensure that quarantine measures are prioritized." The Ministry of Economy and Finance plans to promptly execute 104.1 billion won from the central government's contingency fund and approximately 108.2 billion won from local governments' contingency funds and disaster management funds.

Vice Minister Kim also noted that a dollar strength phenomenon has recently appeared in the global foreign exchange market.

Regarding the recent rise in the won-dollar exchange rate, he said, "Currencies other than the dollar are weak to the extent that even the yen is weak," and added, "We need to consider whether this is a result of Korea's unique circumstances or a consequence of major movements in the international financial market."

Regarding the international credit rating agency Standard & Poor's (S&P) lowering South Korea's growth rate to 1.6% this year, he emphasized, "S&P views the impact of COVID-19 as a shock affecting about one to two quarters and does not consider it an issue that would affect the country's credit rating."

In his earlier opening remarks, Vice Minister Kim said, "Volatility continues as risk-averse tendencies strengthen due to expanding concerns about global economic slowdown and a rapid increase in domestic confirmed cases," and added, "Since mid-February, the global stock market recovery has slowed, and the safe-haven currency, the dollar, has shown some strength."

He further stated, "In the domestic financial market, stock prices are showing weakness, government bond yields are declining, and the won-dollar exchange rate is rising."