[Click eStock] "Kona I, Expected to Benefit from Government Regional Economy Revitalization Policy"

[Asia Economy Reporter Hyungsoo Park] Research Alume on the 25th expressed expectations that policies to revitalize the regional economy, which has been depressed due to the impact of the novel coronavirus infection (COVID-19), will be introduced, and predicted that Kona I would benefit from this.

Researcher Seonghwan Choi of Research Alume explained, "The number of COVID-19 infected patients is rapidly increasing," and "As concerns about COVID-19 infection grow, outdoor activities have become the top avoidance target."

He continued, "Consumption activities are also shrinking, and a negative view of the overall economy is dominant," adding, "International credit rating agencies recently lowered South Korea's economic growth rate to the 1% range due to the COVID-19 situation."

Researcher Choi emphasized, "The government is expected to prepare a special supplementary budget related to COVID-19," and "Although the specific supplementary budget amount has not yet been decided, considering the contagiousness and economic losses of COVID-19, the budget may be larger than during the 2003 SARS (7.5 trillion won) and 2015 MERS (11.6 trillion won) periods."

He said, "First, after executing the budget for preventing the further spread of infectious diseases such as quarantine and medical care, policies to revive the depressed regional economy are also expected to be introduced."

Researcher Choi noted, "Paying attention to the supplementary budget prepared due to the COVID-19 situation, we focus on Kona I as a beneficiary of related policies," and analyzed, "The regional currency led by Kona I has already proven its effectiveness through pilot projects with metropolitan local governments such as Incheon and Gyeonggi Province over the past two years."

Furthermore, he introduced, "The regional currency is a rechargeable check card concept, limited in usage to the autonomous district where the currency is issued, but it provides up to a 10% payback benefit on the amount used," describing it as "a policy that induces a virtuous cycle in the regional economy."

He predicted, "With the general election in April approaching, proposals related to regional currency policies for local votes are also expected to increase," and forecasted, "Kona I recognizes 1% of the regional currency usage amount as sales, so performance improvement is possible depending on additional budget acquisition."