An analysis found that more than 2 trillion won in new sales were generated by the Lee Jae-myung government's people's livelihood recovery consumption coupons.
The Ministry of Economy and Finance on the 1st released "Reference materials on recent consumption trends," citing an analysis by the Korea Development Institute (KDI) on the effect of the people's livelihood recovery consumption coupons.
Kim Jae-hoon, director of the Economic Policy Bureau at the ministry, said, "It is estimated that sales boosted by the consumption coupons in eligible sectors for six weeks immediately after the coupons were issued amounted to 2.1073 trillion won." He said this was based on KDI's difference-in-differences model, which estimated the sales trajectory that would have been expected had the coupons not been issued and compared and analyzed it.
Kim said, "If you attribute all of the sales increase to the consumption coupons, it could be an overestimate," adding, "The difference-in-differences model separates and analyzes how much would have increased even without the coupons." He added, "Of about 5 trillion won in consumption coupon spending made by credit and debit cards during the six weeks immediately after issuance, 42.5% led to an increase in total sales," noting, "This far exceeds the effect of the 2020 emergency disaster relief funds (26.2%–36.1%)."
Compared with the two weeks immediately before issuance, sales in eligible sectors rose 4.07% in the first two weeks after the coupons were issued (Jul. 21–Aug. 3). In the following two weeks (Aug. 4–17) sales grew 5.17%, and in the next two weeks (Aug. 18–31) they rose 5.56%. In contrast, ineligible sectors saw no significant change in sales before and after the coupon issuance.
However, according to Statistics Korea's "Industrial activity trends for August" released the previous day, retail sales in August fell 2.4% from the previous month. Service output also fell 0.7% in the same period. On this, an official at the ministry said, "There can be various factors behind the drop in retail sales," adding, "The effect of the consumption coupons (in generating new sales) continued, but other factors caused retail sales to decline."
The ministry also said that when combining July and August, the upward trend in consumption, including retail sales and service output, continued. Compared with the same period a year earlier, retail sales rose 1.0% in July–August, and services increased 1.6% in the same period.
Kim said, "We expect consumption indicators to rebound in September," adding, "Compared with the same period a year earlier, personal card approvals rose 5.9% in Sep. 1–27, and total card approvals including corporate cards increased 7.3%."