Extra budget feared to lead to rate hikes, inflation, burdening vulnerable
Business owners set to be affected by rising lending rates, consumer pricesBy Kim Bo-eunFinance Minister Hong Nam-ki speaks about the government's 14-trillion-won ($11.7 billion) extra budget plan at the Seoul Government Complex, Jan. 21. NewsisThe government is drawing up another 14 trillion won ($11.7 billion) budget to support small business owners afflicted by the COVID-19 pandemic, but ironically, it is feared that the extra budget will add yet more of a burden to affected households and businesses, as the situation is set to trigger a rise in lending rates as well as consumer prices.The extra budget will be used to provide 3 million won to 3.2 million small business owners who have been hit by the effects of the COVID-19 pandemic and ongoing social distancing measures on businesses. The government is seeking to issue 11.3 trillion won in debt to finance the 14-trillion-won budget, which will be done by issuing government bonds.The situation has led to a rise in treasury bond yields. The three-year treasury bond yield rose 0.091 of a percentage point on Jan.14, when the governme
