Image: Seoul city government promotes consumption coupons. Credit: City of Seoul.
As of July 25, more than 36m Koreans, or 72% of those eligible, had applied to receive the “consumption coupons 소비쿠폰” since the application period began on July 21. The coupons, the Lee Jae-myung 이재명 administration’s first major economic initiative, offer over KRW 6.5t (USD 4.7b) in vouchers, each valued between KRW 150k to 450k (USD 108 to 324), to be used only in small and local retail stores.
Although the effect of consumption coupons will not be measured until after Q3 of this year, renewed optimism is in the air. For Q2, the South Korean economy grew by 0.6% relative to the previous quarter, beating the Bank of Korea 한국은행 forecast of 0.5%. Domestic consumption rebounded even before the consumption coupons were distributed, breaking the past four quarters’ streak of near-zero to negative growth.
