"Substitute Holidays, Daily Consumer Spending of 2.4 Trillion Won... Effective for Boosting Domestic Demand"

As the government is pushing to designate Buddha’s Birthday and Christmas as substitute holidays, an analysis has emerged showing that consumer spending on one substitute holiday amounts to approximately 2.4 trillion KRW, indicating an expected boost to domestic demand.

Hyundai Research Institute announced this in its report titled 'The Effect of Designating Substitute Holidays Depends on Policy Efforts' released on the 19th.

The institute assumed the population affected by substitute holidays to be about 28.09 million, based on the average number of employed persons in 2022. It set the per capita consumer spending on one substitute holiday at 85,830 KRW. By multiplying the population affected by substitute holidays by the per capita consumer spending on one substitute holiday, the institute explained that total consumer spending in the economy reaches 2.4 trillion KRW.

Using production, value-added, and employment inducement coefficients, the economic effect of one substitute holiday was calculated, resulting in a production inducement amount of about 4.8 trillion KRW. Additionally, the value-added inducement amount was estimated at about 1.9 trillion KRW, and the employment inducement number at about 40,000 people.

The institute evaluated that by sector, the effects are largest in the order of restaurant and accommodation services, transportation services, and food and beverage products. Consumer spending on restaurant and accommodation services during one substitute holiday is about 900 billion KRW. The production inducement amount through this is about 1.94 trillion KRW, the value-added inducement amount about 740 billion KRW, and the employment inducement number about 17,000 people.

Next, consumer spending on transportation services is about 630 billion KRW, with a production inducement amount of about 1.12 trillion KRW, a value-added inducement amount of about 420 billion KRW, and an employment inducement number of about 8,000 people. Consumer spending on food and beverage products is about 270 billion KRW, which induces production of about 590 billion KRW, value-added of about 200 billion KRW, and employment of about 3,000 people. In addition, about 610 billion KRW of consumer spending is expected through other channels such as arts, sports and leisure-related services, and health and social welfare services.

The institute emphasized, "Considering the domestic economic conditions where the combined domestic and external recession is intensifying, the expanded designation of substitute holidays is expected to have a positive impact on revitalizing regional economies and boosting domestic demand," and added, "The government, economic organizations, and large corporations should show consideration for workplaces and strengthen the practical implementation of expanded substitute holiday designation through institutional support."