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Korea fund ‘backs green, digital’

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South Korean Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki pledges to bring about further economic growth in the fourth quarter through massive fiscal spending. YONHAP NEWS AGENCY/THE KOREA HERALD

Korea fund ‘backs green, digital’

A planned 20 trillion-won ($16.8 billion) fund tied to Korean New Deal projects would funnel money into 197 items under 40 different green and digital areas, South Korea’s finance minister said on Monday.

The fund – which will be financed over the next five years – will be established “early next year” and invest in areas including 5G, artificial intelligence, smart health care, renewable energy, robot technology and hydrogen vehicles, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki told a meeting of economy-related ministers.

Besides the 20 trillion won fund, dubbed the New Deal Policy Fund, two other funds – including a public fund that would provide tax benefits – related to the Korean New Deal would be established as well.

The government said earlier that the New Deal Policy Fund would consist of three trillion won in government investment, four trillion won in investment from State-run financial institutions and 13 trillion won from private financial firms and the public.

The fund’s guidelines are to be updated with the aid of officials and experts across industries and finance in November.

To attract private investors, the government plans to hold related briefings and presentations from next month. A special committee would be launched to assess projects viable for financial support from the fund.

Meanwhile, the minister added that he expected the South Korean economy to see improvement in the July-September period from the previous quarter, but at a slower-than-expected pace due to the resurgence of the coronavirus in the country.

Asia’s fourth-largest economy contracted 3.2 per cent quarter-on-quarter in the April-June period, with economic risks from the coronavirus weighing heavily on the country’s outbound shipments.

Hong pledged to bring about further economic growth in the fourth quarter through massive fiscal spending.

The Bank of Korea last month slashed its 2020 economic outlook to a sharper-than-expected contraction of 1.3 per cent, as the nation’s daily coronavirus cases had been in the triple digits for more than a month since mid-August due to clusters linked to a church in Northern Seoul and a political rally.

The Korean New Deal is an economic stimulus package announced by the Moon Jae-in administration that would invest 160 trillion won by 2025, focusing on creating 1.9 million jobs and invigorating the virus-hit economy.

THE KOREA HERALD/ASIA NEWS NETWORK

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