Report assessing the economic impact of livelihood recovery consumer coupons

A sign at a store in Gyeongdong Market in Dongdaemun-gu, Seoul, notifies customers that livelihood recovery consumer coupons are accepted, in September last year. [Herald DB]
A sign at a store in Gyeongdong Market in Dongdaemun-gu, Seoul, notifies customers that livelihood recovery consumer coupons are accepted, in September last year. [Herald DB]

By Kim Byeo-ri, The Herald Business

Last year's livelihood recovery consumer coupons generated an estimated 2.8 trillion won (about $1.84 billion) in nationwide sales and lifted annual GDP growth by approximately 0.12 percent, according to a new report.

The Bank of Korea said Wednesday in its "BOK Issue Note: Assessment of the Economic Impact of Livelihood Recovery Consumer Coupons" that about 30.9 percent of fiscal outlays translated into additional sales growth at participating merchants.

The central bank built a big data set of sales figures from six credit card companies that issued the coupons to analyze their effect on merchant revenue. Local gift certificates and prepaid cards were excluded from the analysis.

The analysis found that monthly average sales at participating merchants rose 2.91 percent more than at non-participating merchants. By region, sales at participating merchants outside Greater Seoul and in areas with declining populations climbed 6.37 percent and 5.51 percent, respectively — outpacing the Greater Seoul area, where the figure was essentially flat at minus 0.04 percent.

Ha Jeong-seok, a senior official at the BOK's research department, said coupon payouts were larger outside Greater Seoul, while merchants in the metropolitan area that did not accept coupons still posted relatively solid sales, narrowing the gap between participating and non-participating businesses.

In terms of timing, the sales boost was concentrated in July and August, the early months of the policy's rollout.

After the first round of coupons — which carried a higher face value — the effect lasted about two months, while the second round sustained its impact for roughly one month.

By industry, the biggest sales gains were recorded at clothing, grocery and general merchandise stores including optical shops, up 8.32 percent, followed by casual dining restaurants at 5.84 percent and leisure and recreation businesses at 5.39 percent.

Hagwon and medical clinics, however, saw sales at participating locations fall 9.25 percent and 5.91 percent, respectively, compared with non-participating ones. The BOK said this appeared to reflect households spending more at relatively larger medical facilities as their disposable income rose.

Combining these findings, the BOK estimated that credit card-based consumer coupons generated roughly 2.8 trillion won in additional sales across all participating merchants nationwide. It added that the figure could range from about 1.4 trillion won to 3.6 trillion won depending on the estimation method.

Measured against the 9.1 trillion won disbursed through credit cards — out of total coupon payouts — about 30.9 percent (ranging from 16.1 to 39.8 percent) of fiscal spending fed through to additional sales at participating merchants.

Separately, a survey conducted to assess the coupons' effect on household consumption estimated the marginal propensity to consume at 0.2 for both the first and second rounds — meaning households that received 100,000 won in coupons increased new spending by an average of 20,000 won. That is slightly below the 0.19 to 0.42 range estimated for COVID-19 consumption support payments.

The BOK said the smaller degree of consumer retrenchment just before the coupons were issued, compared with conditions during the pandemic, appeared to have weighed on the figure.

By income bracket, the bottom 20 percent of earners posted a marginal propensity to consume of 0.25, higher than the 0.17 recorded for the top quintile.

The survey was conducted twice among adults nationwide who received coupons: the first round from Aug. 13 to Aug. 20, 2025, covering 1,536 respondents, and the second from Oct. 27 to Nov. 7, 2025, covering 1,010 respondents.

Taking both the merchant sales boost and the household consumption effect into account, the BOK estimated that last year's livelihood recovery consumer coupons lifted annual GDP growth by about 0.12 percent, with a range of 0.07 to 0.15 percent.

Ha said the policy transmission channel — whereby increased household disposable income from the coupons fed through to actual consumption and higher merchant sales, ultimately boosting economic growth — proved effective. He added that fine-tuning the timing, tiered support structure and eligible merchant categories in any future similar policy would help maximize its economic impact.


kimstar@heraldcorp.com