— South Korea’s new government announced a 11.2 trillion won ($10 billion) fiscal stimulus package on Monday, increasing social welfare subsidies and taking steps to deliver on President Moon Jae-in’s election promise to create 810,000 public sector jobs, reported.
AKIPRESS. COM — South Korea’s new government announced a 11.2 trillion won ($10 billion) fiscal stimulus package on Monday, increasing social welfare subsidies and taking steps to deliver on President Moon Jae-in’s election promise to create 810,000 public sector jobs, Reuters reported.
The stimulus package allocates 5.4 trillion won to create public sector and social services jobs, including places for fire fighters, teachers and postal workers, the finance ministry said.
Another 2.3 trillion won will be used to provide subsidies for maternity leave and for elderly people needing medical care.
The government estimates the extra spending will boost economic growth by 0.2 percentage point this year, which may raise its 2017 outlook from current 2.6 percent.
It expects to the extra budget to add 71,000 jobs to the public sector workforce and 15,000 jobs to the private sector.
«This is the first supplementary budget for jobs purposes, » Park Chun-sup, South Korea’s chief of budget, told a news conference.
«There are concerns over mass job losses…10 years ago youth unemployment used to be double the overall jobless rate of 3.5 percent, but now it is three times as high, » Park said.
Unemployment among those aged 15-29 soared to 11.2 percent in April, even though the economy posted the fastest growth in six quarters in the January-March period.
Addressing a widening income gap and sluggish domestic demand is a major challenge for policymakers, especially as exports have only just begun to turn around after falling for almost two years.
South Korea’s average disposable household income fell by 1.1 percent in the fourth quarter, the fastest rate since the 2009 global financial crisis, while private consumption grew just 0.4 percent in the first quarter — well below overall economic growth at 1.1 percent.
«Regarding weak consumption, we believe adding jobs will boost income and affect consumption eventually, » Park said.
The supplementary budget will add to the 400.5 trillion won budget for 2017 that was approved by the National Assembly late last year.
The government plans to submit its supplementary budget proposal to the National Assembly on June 7.
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