President Yoon directs 'Domestic Demand Revitalization Measures' through Emergency Economic and Livelihood Meeting
"The Most Important Thing Is Livelihood"
President Yoon Suk-yeol on the 29th urged the government to "consider directions that can create new economic added value through revitalizing domestic demand." With exports continuing to slump and consumption also falling into a downturn due to high inflation and high interest rates, the plan is to boost domestic demand to restore economic vitality. The government is pushing forward with domestic demand stimulation measures centered on large-scale discount events, including benefits in the lodging and transportation sectors.
On the morning of the same day, President Yoon presided over the 15th Emergency Economic and Livelihood Meeting at the Yongsan Presidential Office and stated, "What is most important in a crisis situation is the stabilization of people’s livelihoods," adding, "Please devote yourselves to economic revitalization through stimulating domestic demand."
The 'Domestic Demand Revitalization Measures' announced by the government this time were formulated in line with President Yoon’s directive last month at the Chief Secretary Meeting to prepare and report a 'comprehensive domestic demand revitalization plan' after pointing out the side effects of high inflation and a high-interest oligopoly system. The core is to implement relay-style domestic demand stimulation measures similar to the 'export revitalization measures' as exports, a key pillar of the Yoon administration’s economic management, are sluggish and domestic demand is also becoming precarious.
The government’s analysis is that difficulties in the Korean economy have continued since last year due to deteriorating external economic conditions. It is judged that high inflation persists due to global supply chain disruptions and rising raw material prices caused by the Russia-Ukraine war, and that the high-interest rate policy responding to inflation has led to a slowdown in the global economy and increased uncertainty in international financial markets.
President Yoon also explained, "Due to the economic slowdown of major trading partners, the export sector, which is a core growth engine of our economy, continues to be sluggish," adding, "Exports and production in the semiconductor and ICT (Information and Communication Technology) sectors, which had greatly increased during the COVID-19 period, are shrinking due to the global economic slowdown." However, he highly evaluated the government’s efforts to revitalize the economy. President Yoon said, "So far, the government has worked to control prices related to shopping baskets and basic living expenses and has devised various financial and tax support measures to alleviate the difficulties of self-employed people and small business owners."
The sector the government has chosen as a catalyst to stimulate domestic demand is 'tourism.' The focus is on measures to revive the tourism industry, which has been stagnant for three years due to the COVID-19 pandemic. The plan includes providing essential travel cost discounts to a total of 1.53 million people: 1 million people with 30,000 KRW per person for lodging fees, 180,000 people with 10,000 KRW per person for amusement facility admission fees, and up to 190,000 people with 100,000 KRW each for vacation expenses. President Yoon asked ministers of various departments to "ensure smooth linkage between consumption and sales of various cultural and tourism products, as well as products from local markets, specialty products, and alleyway businesses."
In particular, President Yoon said, "With the global easing of quarantine measures and the improvement of Korea-Japan relations, conditions are being created to restore consumption and tourism in the food and lodging sectors, which were severely hit by the pandemic, to pre-pandemic levels," and instructed, "We should make the visa system more convenient in preparation for many foreign tourists visiting Korea and quickly increase air routes."
He also emphasized the importance of exports. Considering Korea’s high external economic dependence globally, President Yoon stated, "The fundamental way to overcome the complex crisis is to aggressively enter the global market," adding, "That is why I am running as Korea’s No. 1 salesperson myself, focusing diplomacy on the economy." He continued, "To revitalize domestic demand, not only the central government but also local governments and the private sector must work together," and said, "First, second, and third, it is all about people’s livelihoods. Please approach this with extraordinary determination so that the public can feel the effects."
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