South Korea is launching a nationwide cash handout program as part of a $23.3 billion stimulus initiative aimed at reviving the domestic economy and supporting low-income citizens. The program, set to begin on July 21, will provide a one-time payment of 150,000 won ($110) to all residents registered as of June 18, with additional amounts for vulnerable groups, including 300,000 won for near-poverty households and 400,000 won for recipients of the basic living allowance. The initiative, which runs through September 12, is part of a broader 31.8 trillion-won supplementary budget passed by the National Assembly, designed to revitalize consumption and support those in need.
The second round of payments, scheduled for September 22 to October 31, will provide 100,000 won ($73) to the bottom 90% of income earners, with eligibility determined by national health insurance premiums. The Interior Ministry has emphasized that the program will serve as a catalyst for economic recovery by boosting consumption and supporting those in need, with Vice Interior Minister Kim Min-jae stating, “We will ensure thorough preparations for the rollout of these payments so that they can serve as a catalyst for economic recovery by boosting consumption and supporting those in need,” according to the Korea Herald.
South Korea’s economy, the fourth-largest in Asia, narrowly avoided a technical recession in 2024 as growth stalled in the second half of the year, following a contraction in the second quarter and a weak recovery in the third. The downturn has been widely attributed to domestic political instability, which culminated in the impeachment of then-President Yoon Suk Yeol on insurrection charges after he briefly imposed martial law in December. Newly elected President Lee Jae-myung, who took office on June 4, introduced a stimulus package that includes cash assistance and digital vouchers, and pledged investment in AI infrastructure to promote growth.
However, some economists have warned of possible inflationary effects and long-term risks to fiscal health, as the Finance Ministry plans to fund the stimulus measures through new debt, projecting a fiscal deficit of 4.2% and national debt at 49.1% of GDP. Despite these concerns, the government remains committed to the initiative, viewing it as a necessary measure to stimulate economic activity and support vulnerable populations during a period of economic uncertainty.