[Economic Outlook] Announcement of Disaster Basic Income Payment Plan... Focus on Consumer Price Trends and BSI

Announcement of Disaster Basic Income Payment and Four Major Insurance Premium Reduction Plan at the 'Emergency Economic Meeting'

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The government will announce its plan to provide disaster basic income this week in response to the novel coronavirus infection (COVID-19) crisis. Additionally, data reflecting domestic economic trends, such as consumer prices and business sentiment, will also be released.

The government is considering a plan to provide emergency disaster livelihood support funds of 1 million KRW (based on a four-person household) to 10 million households with median income or below. According to government departments on the 29th, this 'Emergency Disaster Livelihood Support Fund Plan' will be submitted as an agenda item at the emergency economic meeting chaired by President Moon Jae-in. Median income refers to the income of the household that ranks in the middle when all households are ordered by income. In addition, measures to defer or reduce payments for the four major insurances?health insurance, employment insurance, industrial accident insurance?and utility bills are also expected to be announced.

The Statistics Korea will release the consumer price trends for March on the 2nd of next month. Due to the impact of COVID-19, dining out decreased, and the consumer price inflation rate in February was limited to 1.1%. The service price inflation rate was only 0.4%, marking the lowest level since December 1999.

The Bank of Korea will announce the March Business Survey Index (BSI) and Economic Sentiment Index (ESI) on the 31st. The BSI for all industries in February dropped 10 points from the previous month to 65, the largest decline since the related survey began in 2003.

On the same day, the Bank of Korea will disclose the minutes of the extraordinary Monetary Policy Committee meeting held on the 16th. At this emergency meeting, the Bank of Korea sharply cut the base interest rate from 1.25% per annum to 0.75% per annum.

Meanwhile, the government’s financial market stabilization plan worth approximately 100 trillion KRW will be fully implemented starting next week. The bond market fund worth about 20 trillion KRW and the securities market stabilization fund worth about 10 trillion KRW will also begin operations in early next month.