Hong Nam-ki "This Year's Growth Rate Target 0.1%... Do Not Rule Out Possibility of Negative Growth"

By 2022, 5 Trillion Won Invested... Creation of 92,000 Jobs

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, emphasized on the 1st, "We intend to present a growth target of 0.1%, reflecting the effects of the supplementary budget (추경) and other policies, as well as the government's strong policy will."

At a joint briefing with related ministries on the economic policy direction for the second half of 2020 held at the Government Seoul Office, Deputy Prime Minister Hong stated, "The government does not exclude the possibility of negative growth this year, considering the recent domestic and international conditions."

He added, "We are committed to achieving a fast and strong economic recovery that serves as a global model by swiftly implementing policy tasks and making the results visible."

The government plans to further strengthen support for self-employed individuals, small business owners, and companies in crisis or on the brink of collapse in response to the novel coronavirus infection (COVID-19). Additionally, it will maximize support for economic recovery through consumption, investment, and export activation. Furthermore, emphasis will be placed on managing financial and trade risk factors to prevent their emergence.

Deputy Prime Minister Hong said, "To further strengthen support for self-employed individuals, small business owners, and companies in the second half of the year, we will supplement the existing 175 trillion won financial package."

He also added, "We will actively support the digitalization and online transition of self-employed individuals and small business owners by establishing a new 200 billion won smart small business exclusive guarantee."

Regarding consumption, he said, "We will provide consumption coupons in eight major sectors including accommodation, tourism, culture, dining out, and agricultural and marine products." He also stated, "For high-efficiency home appliances rebates, we will add dryers to the rebate targets, supporting a total of 11 items," and "the support scale will be tripled from 150 billion won to 450 billion won."

To strengthen incentives for companies to expand investment, the government plans to consolidate the existing nine facility investment tax benefits into one. Deputy Prime Minister Hong explained, "We will integrate and simplify the existing nine facility investment tax credit systems and provide additional credits on top of the basic credit for increases compared to the average of the previous three years."

Regarding the Korean New Deal, he explained, "The structure is such that the two New Deal axes, Digital New Deal and Green New Deal, are being fully promoted," and "a total of 76 trillion won will be invested by 2025 in 25 core projects across seven sectors."

Finally, he pledged to establish a solid employment safety net. Deputy Prime Minister Hong said, "We will promote the establishment of a nationwide employment safety net, support for living and employment stability in blind spots of employment insurance, and reform to a future-adaptive vocational training system," adding, "We will invest a total of 5 trillion won by 2022 in five projects including support for new entry and transition in the labor market to create 92,000 jobs."