[Exclusive] Only One-Third of Distributed Consumer Coupons Released Since August

8th Consumer Coupon Usage Status
Mainly Used for Movies, Sports, and Accommodation
Some Coupons Used Less Than 10%
Policy Impact Limited and Confusion in Quarantine Measures

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] As the novel coronavirus infection (COVID-19) spread, it was confirmed that about 34% of the consumption coupons promoted by the government to stimulate domestic demand were circulated in the market. Some coupons had a usage rate of less than 10%. While face-to-face consumption was difficult, the consumption coupon policy was not very effective, and there were criticisms that it caused confusion in quarantine measures. Experts agree that to increase the actual consumption effect, cash support for low-income groups is needed rather than stimulating consumption through consumption coupons.

According to the Ministry of Economy and Finance, Ministry of Culture, Sports and Tourism, Ministry of Agriculture, Food and Rural Affairs, and Ministry of Oceans and Fisheries on the 27th, 34% of the eight major consumption coupons issued by the government since last August were used. As of the 19th, the usage rates were 71.0% for movies, 73.0% for sports, 52.6% for accommodation, 4.1% for tourism, 2.0% for performances, and 1.2% for exhibitions. Separately counted agricultural and marine products and dining out had usage rates of 65.6% and 5.5%, respectively, as of the 15th.

The government issued consumption coupons last August but suspended them after two days due to the resurgence of COVID-19. As the spread of COVID-19 subsided, most coupons resumed at the end of October, but they were temporarily suspended again due to the third resurgence. The issuance of the eight major consumption coupons targeted 16.18 million people, providing discount benefits when consuming dining out, tourism, accommodation, etc., as part of the government's consumption stimulation policy, with 168.4 billion won reflected in the supplementary budget.

Regarding this, a Ministry of Culture, Sports and Tourism official stated, "Some coupons are recorded as expenditures immediately upon use, but performances and exhibitions are recorded as actual expenditures one to two weeks after issuance, causing differences." It also seems that repeated cancellations of events due to the repeated easing and tightening of social distancing measures amid COVID-19 influenced the usage.

It is uncertain when the temporarily suspended coupons will be reissued. The day before, the Ministry of Economy and Finance said it would consider allowing dining coupons to be used on delivery applications, but the specific timing or method of use is still under review. A government official explained, "We are trying to prepare methods for platform use next month," adding, "There are many things to consider, such as selecting participating companies and payment methods, so it is difficult to specify a concrete timeline."

Some argue that in a situation where face-to-face consumption is difficult, cash support for low-income groups would have been more appropriate than consumption coupons. Professor Sung Tae-yoon of Yonsei University’s Department of Economics said, "Consumption coupons only have the effect of substituting existing consumption," and added, "If cash support had been provided to low-income or vulnerable groups from the beginning, the consumption stimulation effect for survival would have been greater."

Professor Kim Sang-bong of Hansung University’s Department of Economics also said, "I think domestic demand stimulation policies are necessary, but this measure was not timely," and added, "Until the COVID-19 situation stabilizes, efforts should be made to greatly increase non-face-to-face consumption through measures such as establishing online malls for traditional markets."

Meanwhile, the government expects that private consumption will not decline significantly. In fact, retail sales in September increased by 4.4% compared to the same month last year, and even in August, when there was a resurgence, it increased by 0.3%. Regarding this, Kim Yong-beom, the first vice minister of the Ministry of Economy and Finance, said, "Next year, our economy is expected to recover overall as it escapes the shocks of this year."