S. Korea aims to boost spending, achieve 3.2% GDP growth in 2021

  • 3 years ago
“내년 3.2% 성장…신용카드 소득공제 신설 등으로 소비 늘린다”

To revive consumption in the post-Covid-19 era, the government is offering various tax breaks - encouraging credit card spending, car purchases and consumption of energy efficient electronics.
Eum Ji-young has the details.
The South Korean government is forecasting the local economy this year to shrink by about 1 percent, but Finance Minister Hong Nam-ki said Thursday that next year it will grow by 3-point-2 percent.
"To achieve this projected growth, we have to overcome the crisis quickly, and we have to strengthen the momentum of our economic recovery."
Next year, the government will maintain its expansionary fiscal policy aimed at stimulating the economy with a record-breaking budget worth more than 510 billion U.S. dollars that's about 9 percent bigger than this year's budget.
The spending plan aims to stop COVID-19... and also provides incentives for people to spend more money and boost consumption.
People who spend at least 5 percent more on their credit cards next year than they did this year... can deduct up to 900 dollars more on their taxes.
Those who buy a car in the first half of 2021... will get 30 percent off their consumption tax also up to about 900 dollars.
And a series of retail events will offer bargains on a wide range of products.
To distribute the consumption boost throughout the country, the government plans to issue more than 16 billion dollars' worth of coupons or local currencies, as it calls them that can only be spent in certain regions. Those will mainly be for food delivery apps.
The government is also considering a 30 percent tax cut on long-term capital gains.
The government plans to create a little over a million jobs for people in socially vulnerable groups half of them to start in January.
Eum Ji-young Arirang News.