President Moon Announces "Additional 36 Trillion KRW in Trade Finance"... Record High 300 Trillion KRW Injected into Export Companies (Update)

President Moon Jae-in is presiding over the 4th Emergency Economic Meeting on COVID-19 response held at the Blue House on the 8th. [Image source=Yonhap News]

[Asia Economy Reporter Son Sun-hee] President Moon Jae-in announced on the 8th that "we will provide an additional trade finance of more than 36 trillion won to export companies severely affected by the collapse of global supply chains and contraction of trade." Most of this amount (30 trillion won) will be used to support the extension of export insurance guarantee maturities. The purpose is to enable companies facing blocked overseas sales channels or difficulties in collecting export payments due to the COVID-19 pandemic to export with peace of mind. Accordingly, the scale of trade finance this year is expected to increase significantly from the previously planned support amount (260 trillion won) to a record high of 300 trillion won.

President Moon chaired the '4th Emergency Economic Meeting' at the Blue House on the morning of the same day and stated, "We will ensure that companies do not miss export opportunities due to financial issues." He added, "Even in times of crisis in exports, new opportunities can be created," and "We will actively develop and spread a Korean-style export model tailored to the new trade environment called the 'COVID-19 era.'"

He also said, "We will proactively respond to the reorganization of global supply chains," and "We will further develop the know-how accumulated during the response to Japan's export restrictions to secure a stable supply chain." This follows the previous meeting’s emergency financial measures worth 100 trillion won to inject liquidity into companies, and now additional 'special funds' will be provided to export companies hit hard by the COVID-19 crisis.

Measures to revitalize domestic demand were also mentioned. President Moon said, "To revive the rapidly frozen domestic demand, we have prepared additional domestic demand supplementation measures worth 17.7 trillion won," and "In response to the private sector's good consumption movement, the public sector will take the lead in early payment and advance purchases to create early demand of more than 3.3 trillion won." He continued, "Not only central government ministries but also public institutions, local governments, and local public enterprises will all participate to help commercial districts across the country facing difficulties," and emphasized, "The government will actively support and cheer on the good consumption activities occurring in the private sector through unprecedented tax benefits."

In particular, President Moon said, "In a situation where nearly 120,000 individual business owners are suffering from worsening management due to COVID-19, we have decided on special measures to further reduce tax burdens by 12 trillion won," and "We have also prepared measures to reduce debts and support the reorganization of vulnerable groups facing delinquency risks. We hope this will be a small help in enduring and overcoming difficulties."

Long-term support plans for startups and venture companies to sustain the innovative growth engine of our economy were also announced. President Moon stated, "We will provide additional low-interest funds to startups and venture companies, establish special guarantees, and expand bold incentives for private venture investments to supply about 2.2 trillion won in additional funds."