Democratic Party of Korea Chairman Lee Jae-myung speaks at a traditional market in Jecheon, North Chungcheong Province, Wednesday. Yonhap

Rival parties are vowing to introduce populist policies ahead of the April 10 elections at the expense of fiscal soundness, economists said Wednesday.

The ruling People Power Party (PPP) has pledged to reduce both education and borrowing expenses for parents, irrespective of their income levels. The drive aims to tackle the world's lowest birthrate of Korea.

The main opposition Democratic Party of Korea has proposed providing blanket per capita cash handouts of 250,000 won ($185) across the country. Party chair Lee Jae-myung said this will "revitalize the economy after years of economic slowdown brought on by persistent price surges."

Experts say that the implementation of half-baked measures will deteriorate the country's fiscal soundness, as evidenced by similar previous Moon Jae-in administration's policies that ended up causing a spike in government debt, increased taxes and a property market bubble.

People Power Party leader Han Dong-hoon makes a speech on a street in Incheon, Wednesday. Yonhap

PPP leader Han Dong-hoon said Tuesday that parents with at least three children will be eligible for college tuition fee exemptions regardless of their income levels.

Also revised will be lending rules to grant newlyweds and young parents mortgages at lower costs.

"Three or more children can significantly burden their parents," Han said during an election strategy meeting at Hanyang University in Seoul. "We will seek to expand the measure to include parents of two children."

Around 340,000 people will be eligible for this program, with an estimated budget of 1.45 trillion won.

He noted that double-income households are sometimes excluded from government support for marriage, childbirth, and childrearing, leading to extreme cases where couples delay marriage altogether.

"We acknowledge that current government benefit programs often overlook couples with moderate incomes, a group of parents equally in need of consistent support as their lower-income counterparts," he said.

Han shared the view of easing regulations to extend multiple children benefits to parents with two children, down from the current requirement of three.

Households with three children, for example, can receive discounts on monthly utility bills. They can claim greater tax cuts on their new electric vehicle (EV) purchase in addition to cash benefits.

The ruling party's package followed Lee's proposal of cash handouts, Sunday.

He said it was time for the country to perform cardiopulmonary resuscitation on people's livelihoods to bring life to the economy.

"The economy and the lives of many were destroyed by the Yoon Suk Yeol administration defined by incompetence and failure," he said during an event in Jamsil, southern Seoul.

"Soaring prices continue to suffocate people, especially small business owners and self-employed that survived the Asian financial crisis in the late 1990s and the COVID-19 pandemic. We will spur consumption through increased household incomes. An additional 100,000 won will be given to those earning less than 50 percent of the country's median income. We can finance it with bond issuances and revisions of the government spending plan."

The scheme will require 13 trillion won, according to the party.

However, critics say the handouts defeat the purpose of revitalizing the economy.

"Isn't it common sense that more money will push up the overall prices of goods and services? It's economics 101. The short-sighted approach will derail years of efforts by the country's monetary and fiscal authorities to temper inflation," an economist said on condition of anonymity.

"The idea of receiving 250,000 won in cash is tempting for everyone. Who wouldn't want it? But the far-reaching consequences will be graver than previously thought. Sustained elevated inflation is unlikely to come down, a headache for policymakers. Any measures that could stoke inflation will only worsen the financial strain on nearly all voters in the long term."

Shin Se-don, honorary professor of economics at Sookmyung Women's University, said the barrage of populist pledges do not have serious enough of implications for the country's finances.

"The election is only two weeks away from now, with both parties making last-ditch efforts," he said. "While the pledges are attention-grabbing, they should not be taken too seriously."

Former PPP lawmaker Yun Hee-sook criticized Lee for being ill-informed.

"Lee essentially snubbed political opponents with a comment yesterday: ‘Only 13 trillion won is needed, you ignorant people.' But the real ignorance is not being able to grasp the impact of money of that scale on inflation," she said.