Korea sees strong growth, pledges support for small businesses By Reuters

SEOUL (Reuters) – South Korea’s government has prepared financial support for small businesses struggling due to high interest rates, President Yoon Suk Yeol said on Wednesday, as he updated his economic growth forecast for this year.

“Small businesses are still in a difficult situation. With these ongoing interest rates, their interest rates have increased, and wage costs are also increasing,” Yoon said in his speech before the government’s economic policy announcement that will be released twice a year on Wednesday. .

The government has prepared a total of 25 trillion won ($18 billion) in support measures, Yoon said.

South Korea’s central bank extended its policy freeze for an 11th consecutive meeting in May, keeping inflation at a 15-year high, as it reiterated its warning about the risks of inflation.

Asia’s fourth-largest economy grew in the first quarter at the fastest pace in two years, thanks to strong exports, but there are concerns that the recovery may be flat as high interest rates weigh on domestic demand.

The announcement will also include tax incentives for companies that increase dividend payouts as part of the government’s “Enterprise Value Enhancement Program”, which aims to boost the domestic stock market.

Yoon said consumer prices were stabilizing in Asia’s fourth-largest economy as headline inflation fell for a third straight month while foreign investment looked firm.

Following Yoon’s comments, Finance Minister Choi Sang-mok said the ministry has raised its economic growth forecast for this year to 2.6% from 2.2% previously.

($1 = 1,388.9400 won)