South Korea unveils $12bn budget to cushion blow of COVID curbs

Restaurants, bars and gyms have been hit hard by a business curfew that will remain in place until at least February 6.

Korean restaurant
South Korea has implemented a curfew for restaurants, bars and gyms [File: Ed Jones/AFP]

South Korea unveiled a 14 trillion won ($11.75bn) supplementary budget on Friday to support the self-employed and small businesses that have taken a heavy hit from extended COVID-19 curbs.

Some 11.5 trillion won will be used to help small business owners and compensate their losses caused by the extension of virus-related measures, the finance ministry said.

Another 1.5 trillion won is earmarked to secure COVID-19 treatment pills for 400,000 people and 25,000 hospital beds.

The other 1 trillion won will be used as contingency reserves should the Omicron coronavirus variant spread further and require more support.

To finance the extra stimulus, the government will issue 11.3 trillion won worth of treasury bonds and utilise 2.7 trillion won from public fund reserves.

Presidential election

The extra budget, which will be submitted to parliament on Monday, comes at a time when the ruling Democratic Party is struggling to recover public support just weeks ahead of the country’s 2022 presidential election.

With the latest supplementary budget, the total government spending would increase to a record 621.7 trillion won this year, adding to the already approved 607.7 trillion won budget.

That would be an 11.4 percent increase from the 2021 original budget, while it is also expected to bring the ratio of government debt to gross domestic product to a record 50.1 percent.

South Korea extended its tougher social distancing rules for three more weeks, including a 9pm curfew for restaurants, cafés and bars and limited size of private gatherings, amid concerns over a looming wave of the highly contagious Omicron variant, especially ahead of the Lunar New Year holidays.

Source: Reuters