S-Korea contemplates giving nationals free money
(MENAFN) South Korea is launching a major stimulus effort that includes direct cash payments to residents in an attempt to revive domestic consumption and counter economic stagnation, according to the Korea Herald. The initiative is part of a supplementary budget totaling 31.8 trillion won (around $23.3 billion) approved by the National Assembly on Friday.
Starting July 21 and running until September 12, all citizens living in South Korea as of June 18 will receive a one-time payment of 150,000 won (about $110). The payments will be distributed via credit/debit cards, prepaid cards, or local gift certificates.
Vice Interior Minister Kim Min-jae, who leads the task force overseeing the plan, emphasized that the program is designed to jumpstart consumer spending and assist vulnerable groups. In addition to the universal payment, low-income families, single parents, and welfare recipients will receive enhanced support ranging from 300,000 to 400,000 won ($220–$290). Rural residents will get an extra 50,000 won to help reduce regional inequality.
A second payment phase, scheduled from September 22 to October 31, will grant 100,000 won ($73) to the bottom 90% of income earners, with eligibility based on health insurance contributions.
The move follows a period of economic stagnation in 2024, when South Korea narrowly avoided a technical recession amid political chaos. Former President Yoon Suk Yeol was impeached after briefly imposing martial law in December, causing further instability.
Newly elected President Lee Jae-myung, who took office on June 4, has introduced this stimulus package alongside investments in artificial intelligence infrastructure. While the plan aims to spur economic recovery, some economists have raised concerns over inflation and rising debt, as the government intends to finance the initiative through borrowing. The Finance Ministry estimates a 4.2% fiscal deficit and national debt reaching 49.1% of GDP.
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