March 30, 2020 / 2:45 AM / 2 months ago

South Korea to pay families hundreds of dollars to ease coronavirus impact

SEOUL (Reuters) - South Korea will make emergency cash payments to all but the richest families and draw up a second supplementary budget next month in a bid to ease the drawn-out economic impact of the coronavirus outbreak, President Moon Jae-in said on Monday.

A couple prepares to watch a movie from their car at a drive-in theater that has been temporarily made for residents to enjoy movies while keeping social distancing following the outbreak of the coronavirus disease (COVID-19), in Seoul, South Korea March 27, 2020. REUTERS/Kim Hong-Ji

Moon, after an emergency meeting with economic policymakers, said an “emergency disaster relief payment” of up to 1 million won ($820) would be made to all households except the top 30% by income, totalling some 9.1 trillion won ($7.44 billion).

Officials said they would prepare another extra budget worth 7.1 trillion won ($5.80 billion) for parliamentary approval in April and some small- and medium-sized companies would be exempt from paying utility bills starting this month.

“Citizens suffered from the coronavirus and they all deserve to be rewarded for their pain and participation in preventive efforts,” Moon told the meeting in comments broadcast on television.

“There is a need for the government to reserve as much financial power to brace for an economic shock with no end in sight and promptly respond to labour market insecurity and any potential corporate liquidity crisis.”

The new package is the latest in a recent series of steps the government has taken to ease the pressure on Asia’s fourth-largest economy.

Finance Minister Hong Nam-ki said the government would have to issue deficit-covering bonds to at least partially fund the second budget.

Previous measures have included an interest rate cut, a 11.7 trillion won ($9.54 billion) supplementary budget, raising a cap on currency forward positions for banks and a rescue package for companies totalling 100 trillion won ($81.6 billion).

South Korea has largely managed to control the epidemic and drawn worldwide praise for its testing. Its daily number of new infections has been hovering at up to 100 for the past three weeks. Authorities have tightened border checks as the number of imported cases has risen.

The Korea Centers for Disease Control and Prevention (KCDC) reported 78 new cases on Monday, at least 13 of whom were people who arrived from abroad, most of them South Koreans.

The national tally stood at 9,661 and the death toll rose by four to 162 as of late Monday. The KCDC said 195 more people had recovered from the virus, bring the total of 5,228.

Of the new cases, at least 10 were linked to a church in western Seoul, while a hospital in the hard-hit city of Daegu saw more than 75 infections over the past few days.

South Korea announced on Sunday that all overseas arrivals would have to undergo two weeks of mandatory quarantine starting on April 1.

Breaking the rules is punishable by a year in prison or a fine of up to 10 million won ($8,160).

Reporting by Hyonhee Shin and Sangmi Cha; Additional reporting by Joori Roh and Heekyong Yang; Editing by Raju Gopalakrishnan, Nick Macfie and Barbara Lewis

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