Photo: YONHAP News
In order to save the economy, which was shrunken by Corona 19, the government provided emergency disaster assistance to the entire population in May.
A study found that this disaster subsidy had an effect on boosting consumption, and was particularly effective in increasing sales of traditional markets and small business owners.
The Corona 19 First Emergency Disaster Support Fund paid in May last year was KRW 1.4.2 trillion, of which 30% and KRW 4 trillion were analyzed by KDI as direct consumption.
Thanks to this, private consumption increased by 1.5%, while real gross output decreased by more than 3% in the second quarter of this year, and it was diagnosed as a not low effect even compared to overseas cases.
KDI estimates that the rest of the disaster assistance funds that did not lead to direct consumption were used for debt repayment.
When comparing before and after the disaster subsidy payment, the consumption of semi-durable goods such as clothing and miscellaneous goods increased the most at 10.8%p, and consumption of essential goods such as food increased by 8%p.
In particular, the effect of small-sized businesses was greater, and sales increased by 7.3% for businesses below 300 million and over 15% for traditional markets.
Experience between small business owners and traditional markets has improved significantly since May in Gyeonggi Province.
However, in the face-to-face service industries that suffered great damage, such as restaurants, travel, and saunas, the effect of the disaster subsidies was limited.
In the case of the travel industry, -61% to -55%, and the bath industry -26% to -21%, the sales increase was not significant.
Therefore, KDI stressed that industries with severe sales declines should consider direct income support to their workers.
In addition, he advised that there was no shrinking in consumption in areas where the spread of Corona 19 was weak, and that disaster assistance should be operated with customized payments tailored to the degree of damage rather than collective payments according to income level.