GOVT'S ECONOMIC MEASURES AMID VIRUS

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The government has increased the childcare subsidy for families for up to 500,000 won and 10 days and exempted several government fees for businesses hit by COVID-19. Meanwhile, the Bank of Korea froze the benchmark interest rate although it said Korea is unlikely to reach its growth target of 1% this year.

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​The government has provided a solution to growing calls for childcare subsidies in the wake of delayed opening of childcare centers, kindergartens as well as the opening of online classes. More than 30 billion won will be added to double the in-family childcare subsidy to maximum of 500,000 won for up to 10 days. Also, a portion of the traffic congestion share paid by supermarkets and department stores and the road and river occupation fees paid by private businesses will be exempted. Special loans will also be expanded.

[Soundbite] HONG NAM-KI(DEPUTY PRIME MINISTER) : "30 billion won in special loans will be provided by changing the purpose of the sports fund for sports facility businesses, sporting goods shops, and sports service providers."

Meanwhile, the Bank of Korea's Monetary Policy Committee decided to freeze the benchmark interest rate at a record low of 0.75% for now.

[Soundbite] LEE JU-YEOL(BANK OF KOREA GOVERNOR) : "It's better to decide on the policy direction while watching how fiscal, financial and monetary policies affect the real economy and the financial market."

But concerns over economic outlook continues to grow. The global economy is very likely to go into recession this year and the impact is projected to be more severe than the one felt during the financial meltdown in 2008.

[Soundbite] LEE JU-YEOL(BANK OF KOREA GOVERNOR) : "I don't think it's going to be easy for Korea to reach a growth rate above 1% this year. But we could achieve a positive growth if we made some basic assumptions."

The central bank chief said that market stabilization measures are on the drawing board as the financial market may worsen again. Governor Lee cited the Federal Reserve Board, which established a special corporation with government guarantee to purchase corporate paper or company stocks, suggesting that Korea may adopt this system.