During the Lunar New Year holidays in January, the government designated a temporary holiday to stimulate domestic demand. This, was expected to stimulate the economy and expand opportunities for people to rest, but discussions on the effectiveness continue. Many people were happy about the consecutive holidays, but self-employed people reacted negatively because they were worried about decreased sales.
As the consecutive holidays have been prolonged, overseas travel demand from Southeast Asia and Japan has soared compared to domestic consumption. Travel agency MODETOUR saw its overseas travel product sales increase by 93% compared to the Lunar New Year holidays last year, and HANATOUR also increased by up to 30%. On the other hand, traditional markets and restaurants had to be closed for a long time due to decreased customers, and food service consumption was reduced due to rising prices. In addition, the burden of labor costs increased due to the prolonged consecutive holidays.
In the end, the temporary holiday positively impacted some industries, including the travel industry, but showed a minimal effect on the overall domestic economy. Experts point out that temporary holidays can contribute to short-term consumption growth, but there is a limit to stimulating domestic demand in the long term.
I do not think there is much need for a temporary holiday to stimulate domestic demand. I am happy to have more holidays, but the long-term economic effect remains questionable. Therefore, systematic measures are needed rather than simply increasing the number of holidays.
For example, a plan to increase utilization by issuing consumption coupons in traditional markets can be considered. Strengthening domestic travel infrastructure such as Jeju Island is desirable for induced domestic consumption. In addition, it is necessary to consider ways to balance overseas consumption and domestic demand through discount events for Koreans during consecutive holidays.
Additional temporary holidays may be designated to revitalize domestic demand in the future. Therefore, it is more important to closely examine its nature and develop practical measures to stimulate the economy.
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