The Bank of Korea published an issue note evaluating the economic effects of the 2025 People’s Livelihood Recovery Consumption Coupons, a KRW 13.522 trillion program in the supplementary budget. Using credit card sales data and two survey waves, the study estimates the coupons raised 2025 GDP by 0.12%, with a range of 0.07% to 0.15%, by increasing household consumption and sales at eligible small merchants. Average monthly sales per eligible merchant rose about 2.91% more than at ineligible merchants, with alternative estimates ranging from 1.46% to 3.76%, and the effect was concentrated in the early phase of both payment rounds. The note estimates an additional KRW 2.8 trillion in sales at eligible merchants nationwide, equivalent to 30.9% of fiscal outlays based on the KRW 9.1 trillion issued through credit cards, while alternative methods produce a range of KRW 1.4 trillion to KRW 3.6 trillion and 16.1% to 39.8% of outlays. The survey-based marginal propensity to consume out of the coupons was 0.20, with stronger consumption effects among lower-income groups. The first-round marginal propensity to consume was 0.21 versus 0.18 in the second round. Sales effects were larger in non-metropolitan areas and strongest in general merchandise stores, followed by restaurants and leisure goods stores. The study notes that the merchant sales analysis excludes Local Love Gift Certificates and prepaid cards, which may understate effects in rural depopulation areas where non-credit-card use was higher. For future programs of a similar kind, the note says economic effects could be improved through more careful design of timing, differentiated support and the scope of eligible merchants. It also points to the need for broader policy efforts to improve the competitiveness and productivity of self-employed workers and small business owners.

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