The government will extend some 38.4 trillion won ($34.86 billion) in financial support for companies and small merchants suffering from liquidity crunch ahead of Lunar New Year’s Day, the Finance Ministry said Wednesday.

The size of the financial support package, usually planned weeks before the holiday to spur spending, has increased by 2.1 trillion won from last year.

The three-day Lunar New Year holiday kicks off on Feb. 11.

“Although the third wave of the COVID-19 epidemic is gradually subsiding, it is worried that the recent outbreak of avian influenza and record cold waves may exacerbate existing economic problems involving local economy, employment and consumer prices,” said Finance Minister Hong Nam-ki at a meeting with economy-related ministers in Seoul.

The 38.4 trillion won-loan program will be provided by commercial and state-run banks as well as the Bank of Korea. Maturity for lending and loan guarantee totaling 10.1 trillion won will also be extended, the ministry said.

To prevent temporary cash shortfalls causing business shutdowns, the loans will be offered to small and midsize firms and mom-and-pop shops hit hard by the prolonged COVID-19 pandemic, it added.

A 114.7 billion worth of subsidies for some 150,000 low-income households will also be handed out in advance so that they can use the payment during the New Year holidays.

In order to stimulate consumption and revitalize the local economy, the government will issue a trillion won worth of Onnuri Gift Certificates in February, which can be used at traditional markets and nearby small stores. The coupons will be offered with a 10 percent discount.

Measures also include stabilizing consumer prices by expanding the supply of food in high seasonal demand such as apples and pears, officials said. The government will remove tariffs on 50,000 tons of eggs between late January and June in an attempt to ease soaring egg prices due to the continuous spread of avian influenza, they said.

During the holiday, some 620 COVID-19 test sites and 72 infectious disease hospitals will continue to be up and running. A total of 25.5 billion won will be given before the holiday starts to private hospitals that run test centers to support their facilities and equipment spending.

By Park Han-na (hnpark@heraldcorp.com)