South Korea said Thursday that it will expand flexible working hours in the private and public sectors in an effort to boost domestic consumption and stimulate the economy, while expanding financial support to lower income brackets.
The government unveiled a set of measures to reinvigorate private consumption at a ministerial-level meeting presided over by Acting President Hwang Kyo-ahn in Seoul.
"Domestic demand is showing some signs of slowdown, offsetting a slight upturn in exports, as consumer sentiment was dampened by rising internal and external uncertainties and the enforcement of the anti-corruption law," Deputy Finance Minister Lee Chan-woo said in a press conference held prior in Sejong on Tuesday, the administrative city some 130 kilometers south of Seoul.
"If private consumption, which accounts for some half of the gross domestic product, remains downbeat longer, the first quarter data may fail to meet the target," said Lee. "A slump in consumer sentiment and private consumption dragged down the recovery pace to a large extent and will affect the country's GDP growth in the first quarter."
Private consumption expanded 1 percent on-quarter in the April-June period last year, but grew 0.5 percent and 0.2 percent in the following quarters.
The composite consumer sentiment index has been on a decline for months and posted 93.3 in January, the lowest since March 2009 when it stood at 75 in the aftermath of the global financial crisis.
Also, the anti-graft act, which took effect in September last year, weighed heavily on the service sector, especially in eatery businesses and bars, as the law bans those working in government, media and schools from receiving free meals and gifts worth 30,000 won ($26) and 50,000 won, respectively.
"The measures are aimed at reviving consumer sentiment of the mid- to high-income brackets, and easing the living costs of the lower class," said the official.
The government will designate a "family day" once a month to give people more time to go shopping and travel, with incentives to be given to companies and institutions that adopt flexible working hours.
It said they may opt to work eight hours and 30 minutes per day Monday to Thursday and get off work two hours earlier on Friday.
The government will also draw up various discount programs for railways and hotels to encourage people to spend their after-work time in the country.
In a bid to attract more foreign visitors, visa commission exemptions will be given to Chinese and Southeast Asian tourists, while foreigners who visit South Korea for the second time will face a simpler visa screening process.
The government also came up with a package of financial support for needy people.
It will raise the unemployment benefits from the current 43,000 won per day in a way to help young job seekers stay afloat, with state-backed loan programs for the youth to be expanded to 12 million people from 8 million.
Some 34,000 units of public rental houses will be provided in 2017, up from an earlier plan of 27,000 units, while government-funded housing agencies will raise the ceiling of housing loans. (Yonhap)