Government's 2025 cash handouts created 2.8 trillion won in additional sales
The Lee administration doled out 13.5 trillion won to Korean citizens last year to stimulate domestic consumption which contributed 0.12 percent to the country's overall economic growth, according to the BOK.
On the first day of applications for the first round of state-funded cash handouts, residents apply at the Haenggung-dong Community Service Center in Paldal District, Suwon, Gyeonggi, on July 21.
YONHAP
The government's 13.5 trillion won ($8.9 billion) in cash handouts is estimated to have created an additional 2.8 trillion won in sales and contributed 0.12 percent to the country's economic growth last year, a central bank report showed Wednesday.
As part of the Lee Jae Myung government's efforts to stimulate domestic consumption, 150,000 won was provided to all Koreans residing in the country in July 2025 under the "consumption coupon" program.
Another round of payments worth 100,000 won per person was granted to 90 percent of citizens beginning in September of last year.
Some 9.1 trillion won, or 70 percent of the total, was distributed through credit cards, while the remainder was provided in the form of prepaid cards or local government-issued gift certificates.
According to a report published by the Bank of Korea (BOK), sales at shops and restaurants accepting consumption coupons increased 2.91 percent compared with stores where the coupons could not be used, based on related credit card data.
By region, sales rose 6.37 percent in provincial areas, while sales in the greater Seoul area slipped 0.04 percent.
Most of the sales increase was recorded during the first two months after the coupons were distributed.
As a result, participating shops and restaurants were estimated to have generated an additional 2.8 trillion won in sales as a result of the government cash handouts, equivalent to 30.9 percent of the 9.1 trillion won distributed through credit cards.
The BOK estimated that the government's cash handouts raised the country's 2025 economic growth by 0.12 percent.
"An increase in household disposable income generated by consumption coupons led to higher actual consumption and increased sales at participating merchants, thereby boosting economic growth," the report said.
Yonhap
