SEJONG, May 4 (Yonhap) — Nearly 94 percent of South Koreans who received state virus relief grants in cash last year spent them on consumption expenditures, a report said Tuesday, in a show of their positive impact on overall consumer spending.
In May last year, the government started providing relief handouts of up to 1 million won (US$890.5) to every household to cushion the economic fallout from the coronavirus pandemic.
Generally, recipients used relief grants through credit cards, check cards, prepaid cards or local vouchers, but cash was offered to those in the vulnerable social group. Cash-receiving households came to 2.87 million, accounting for 12.9 percent of the total.
Citing a sample survey, the report from the state-run Korea Development Institute said 93.7 percent of the total cash recipients spent it on consumption expenditures.
Nearly 4 percent saved state-provided cash grants, while 1.8 percent used them to pay back debts.
Spending on food, household goods and other necessities accounted for 70.3 percent of consumption expenditures, followed by health and medical costs with 15.7 percent, and dining out with 6.9 percent.
The findings also showed 21.7 percent of the emergency cash grants were spent on unplanned consumption.
Slightly over 47 percent of the respondents said they spent most of the cash grants in May last year, according to the survey. The report didn’t disclose the size of the sample.