Faced with slow growth and an aging population, South Korea launched a $10 billion stimulus package yesterday to create jobs and bolster welfare programs in the country.
The 11.2 trillion won ($10 billion) plan is the first since Moon Jae-In was elected president of Asia's fourth-largest economy last month, and the finance ministry said it will primarily be funded by tax revenue rather than issuing state bonds. Under the proposals, Seoul will spend 4.2 trillion won to help create 110,000 jobs -including 71,000 in the public sector -while 7 trillion won will be set aside for elderly welfare, working mothers and low-income households. Among the new jobs being targeted are firefighters, police officers, assistant teachers and social workers, while young job seekers, small businesses and tech start-ups will also be helped.
Financial assistance will be increased for women on maternity leave, while plans are being made to open more daycare centers and nursing homes for the elderly. In addition, businesses hiring more full-time workers will also receive extra funding. Unemployment among under-30s hit 11.2 percent in April, more than double the rate for the entire working population. South Korea's economic growth, which hit 2.8 percent in both 2015 and 2016, is expected to further slow to 2.6 percent this year, according to the central Bank of Korea. The country's birthrate is one of the world's lowest and has led to concerns about the burden of welfare funding for the aging population.