"Longer Holidays Lead to More Overseas Travel, Hindering Domestic Demand"
Limited Impact on Domestic Demand During Lunar New Year Holiday
Expectations are rising that October 10, which falls right after the Chuseok holiday, could be designated as a temporary holiday. However, the government has drawn a clear line, stating that it is "not even under consideration."
On the 15th, Korea Economic Daily reported this, citing the Ministry of Economy and Finance.
Expectations are rising that October 10 could be designated as a temporary holiday, but the government has drawn a clear line, stating that it is "not even under consideration." The photo shows Vietnam, a popular destination for overseas travel. Getty Images
The discussion about a temporary holiday emerged after President Lee Jaemyung instructed on the 14th, "Proactively devise measures to boost domestic demand by utilizing the long Chuseok holiday and other opportunities." If October 10 were to be designated as a holiday, it would create a golden holiday period of up to 10 consecutive days, as it would connect National Foundation Day (October 3) and the Chuseok holiday (October 6-9).
However, an official from the Ministry of Economy and Finance stated, "The government is not considering designating a temporary holiday during the Chuseok holiday period at all," adding, "If the holiday period is extended, demand for overseas travel will surge, which would actually hinder efforts to boost domestic demand. In addition, a reduction in the number of working days would inevitably impact exports and production." An official from the Ministry of Personnel Management also said, "There has been no discussion whatsoever regarding the designation of a temporary holiday."
Previously, during the Lunar New Year holiday in January, the government designated January 27 as a temporary holiday, extending the three-day holiday to six days. However, it was evaluated that the expected effect on stimulating domestic demand was not significant.
The government stated, "If the holiday period is extended, overseas travel will increase, which rather hinders domestic demand stimulation," and said it is not considering designating October 10 as a temporary holiday. The photo shows the duty-free area of Terminal 1 at Incheon International Airport during the holiday period last May. Photo by Yonhap News
According to the National Assembly Research Service, the number of outbound tourists in January this year reached a record high of 2,973,000, an increase of 9.5% from the previous month and 7.3% from the same month last year. In contrast, domestic tourism spending amounted to 3 trillion won, a decrease of 7.4% from the previous month and 1.8% from the same month last year.
Exports and production also suffered. The number of working days in January decreased by four compared to the previous year, resulting in exports dropping sharply by 10.2% year-on-year to 49.1 billion dollars. Industrial production also declined across manufacturing, services, and construction, falling by 1.6% from the previous month and 3.8% from the same month last year.
Additionally, since temporary holidays do not apply to workplaces with fewer than five employees, the issue of "inequality in the right to rest" has also been raised. Workers at such small businesses account for about 29% of the total 28.58 million employed persons.
However, depending on public sentiment, it cannot be completely ruled out that the government may suddenly designate a temporary holiday right before the Chuseok holiday. There is a precedent: the temporary holiday on January 27 was confirmed at a Cabinet meeting just 13 days in advance.
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