South Korea to give citizens free money
The initiative is part of a 31.8 trillion-won ($23.3 billion) supplementary budget passed by the National Assembly on Friday. The program is scheduled to begin on July 21 and will run through September 12.
'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,' said Vice Interior Minister Kim Min-jae, who leads the interagency task force overseeing the initiative.
All citizens residing in South Korea as of June 18 will receive a one-time payment of 150,000 won ($110). Disbursements will be made via credit or debit cards, prepaid cards, or local government-issued gift certificates.
Additional support will target vulnerable groups. Near-poverty households and single-parent families will receive 300,000 won ($220), and recipients of the basic living allowance will get 400,000 won ($290). Those living in rural areas will receive an additional 50,000 won to promote 'balanced regional development,' according to the Interior Ministry.
A second round of payments, planned between September 22 and October 31, will provide 100,000 won ($73) to the bottom 90% of income earners. Eligibility will be determined based on national health insurance premiums, with details to be announced in September.
South Korea, Asia's fourth-largest economy, 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, culminating 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.
Some economists, however, have warned of possible inflationary effects and long-term risks to fiscal health, since 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.
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