In a bold move to stimulate exports and tourism, South Korea’s finance ministry has announced a provision of up to 181 trillion won ($137 billion) in affordable loans for exporters, effective until the end of this year. The ministry’s strategy also involves waiving visa processing fees for Chinese tourists, a move designed to boost tourism and the country’s economy.

The government is mapping out plans to increase the influx of Chinese tourists, aiming to raise the current figures from one million to 1.5 million per month. This increase in tourism is expected to be achieved through expedited visa fee waivers and a series of coordinated tourist events with retailers. With exports predicted to swing to growth in the fourth quarter, the finance minister, Choo Kyung-ho, remains optimistic about the country’s trade balance.

South Korea to Boost Exports and Tourism with Economic Stimulus Measures

South Korea is set to inject 181 trillion won ($137 billion) into its economy by the end of 2019, offering low-interest loans to exporters and waiving visa fees for Chinese tourists, according to a statement from the finance ministry on Monday.

Aiming to Increase Chinese Tourists

The government’s initiative is geared towards increasing the number of Chinese tourists from the current one million to 1.5 million each month. This increase will be achieved by fast-tracking the waiving of visa fees and organizing tourist events in collaboration with retailers.

Positive Trade Forecast

Finance minister Choo Kyung-ho expressed optimism for the country’s economic outlook, predicting a surplus in the trade balance in September. He stated on Monday, "the declines in exports will further ease, and exports are likely to swing to growth during the fourth quarter."

Economic Growth Slows Down

However, analysts at ING suggest a slowdown in the nation’s economic growth for the third quarter. Their forecasts indicate a deceleration to 0.2% quarter-on-quarter seasonally adjusted from 0.6% in the second quarter, attributing it to a further slowdown in domestic demand.

Reporting by Cynthia Kim; Editing by Kim Coghill

Takeaways

South Korea’s ambitious strategy to stimulate its economy by focusing on exports and tourism, particularly targeting Chinese tourists, exhibits its proactive approach to tackle economic slowdown. However, only time will tell if these measures will help to counterbalance the slowdown in domestic demand and achieve the forecasted growth in the fourth quarter.