High-fuel-cost relief funds boost small-business sales 10.6%

Sales at small businesses nationwide rose 10.6 percent year-on-year in the three weeks after the government began disbursing high-fuel-cost relief funds, the Ministry of SMEs and Startups said Saturday.

The ministry has been distributing a total of 6.1 trillion won ($3.95 billion) in relief funds through a supplementary budget to ease the financial burden on ordinary households from high fuel costs, a weak won and rising prices. The funds were designed to be spent only at businesses with annual sales of 3 billion won or less, channeling consumption into local neighborhood commercial districts.

The analysis drew on sales data from 160,000 small-business establishments compiled by Korea Credit Data. The ministry compared sales figures for the three-week period from May 18 to June 7 — when the second round of payments began reaching 70 percent of the population — against the same period a year earlier.

Sales among eligible businesses rose 10.6 percent year-on-year after the funds were disbursed and were also up 2.7 percent from the week immediately before payments began. The ministry said the gains reflected a recovery in consumer sentiment that had been suppressed by high fuel costs, with the relief funds acting as a catalyst for spending in local commercial districts.

By region, Busan recorded the highest sales growth at 16.0 percent, followed by South Gyeongsang Province at 14.7 percent, Daegu at 14.0 percent and Incheon at 13.8 percent. Even Jeju Island, which posted the smallest gain, saw sales rise 5.2 percent, meaning all 17 cities and provinces nationwide recorded year-on-year growth of at least 5 percent.

By sector, everyday lifestyle spending stood out. Retail sales rose 16.4 percent, the highest among all sectors, while education services climbed 11.2 percent, above the overall average. Arts, sports and leisure businesses saw the smallest increase, at 4.6 percent.

Traditional markets also showed a marked effect. Sujeong Traditional Market in Dong-gu, Busan, saw sales jump 123.7 percent year-on-year, while Gangwon Province's Dongjoekbada Jungang Market rose 114.8 percent and South Gyeongsang Province's Samcheonpo Jungang Market climbed 114.0 percent — more than doubling in each case.

Officials said the results were significant not merely because funds were paid out, but because they translated into actual consumer spending. The policy decision to restrict eligible venues to businesses with annual sales below 3 billion won was seen as having effectively steered consumption toward neighborhood commercial districts and traditional markets. The government said it plans to continue analyzing policy outcomes using public and private data and to incorporate the findings into future small-business support measures.

"Through collaboration with a private data company, we were able to confirm that the high-fuel-cost relief fund made a tangible contribution to the recovery of people's livelihoods and the revitalization of local commercial districts," said Lee Byeong-gwon, second vice minister of SMEs and Startups. "We will continue to integrate and build on public and private data in the small-business sector to develop more precise and effective tailored policies."