South Korea will inject a net 6 trillion won ($5.2 billion) into a supplementary budget for the economy in order to invigorate Asia's fourth-largest economy struggling with faltering exports and flaccid domestic demand, the finance ministry said Thursday.
Last month, the government announced a set of stimulus programs, including 10 billion won in extra budget for the second half of this year, citing rising uncertainties at home and abroad.
South Korea's exports posted negative growth for a record 18 straight months as fast-falling oil prices dampened demand from emerging markets.
Retail sales have seemed to offset the downturn in outbound shipments on the back of the government-led tax-cut programs and temporary holidays, but recent data show that the upbeat trend is slowing down to some extent.
On the external side, the global financial market has become widely volatile, further triggered by the recent British vote to leave the European Union, or Brexit.
The finance ministry said it will finalize the detailed amount of the extra budget later this week and submit the bill before the National Assembly as soon as possible.
Out of the 10 trillion won plan, a net 6 trillion won will be used to stimulate the real economy, the largest amount in seven years since 2009 when the country was in a deep slump in the aftermath of the global financial crisis.
The remaining 2 trillion won will go to support provincial governments' budget and another 2 trillion won will be spent to pay back Treasurys.
"Most of the planned supplementary budget will be used to buttress the economy. It will be enough to attain our goal," said a ministry official.
The ministry said it will focus on minimizing fallout from on-going full-scale corporate restructuring in the job market and supporting the regions where major shipyards are located.
South Korean shipbuilders, including industry leader Hyundai Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co., have been under severe financial strain in the face of a fall in new orders amid a protracted slump in the world's economy.
They announced self-rescue plans, including asset sales and downsizing, which will likely bring about massive layoffs in the shipbuilding sector. (Yonhap)
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