Korea's finance minister said Wednesday that the government will do "sufficient" fiscal reinforcement in the second half to prop up Asia's fourth-largest economy, reiterating his earlier hints that the government is considering drawing up an extra budget.

"We are in grave danger as the economic conditions will likely be worse in the second half. The government has to move more aggressively to deal with it," Finance Minister Yoo Il-ho said in an economy-related ministers' meeting in Seoul.


"The government will come up with sufficient fiscal expansion to buffer the downside risks in the economy and employment."

His latest remark came as the necessity of drawing up a supplementary budget to prop up the economy is becoming apparent.

The finance minister had adamantly opposed plans to create an extra budget to achieve the government's 3.1 percent growth target for 2016.

Yoo said the Korean economy will face a tougher economic environment in the latter half of the year due to the end of an excise tax cut program and painstaking corporate restructuring process in labor-intensive industries like the shipbuilding sector.

Heightened financial uncertainties, including a possible U.S. rate hike and a landmark British referendum, also weigh heavily on the country.

Against this backdrop, Korea's exports fell 6 percent on-year in May, marking a record 17-month losing streak, while industrial output fell 2.8 percent in April from a year ago, posting negative growth for the second consecutive month and widening its downward pace from March.

"We are now mapping out the second-half economic policy plan focusing on cushioning fallout from corporate restructuring and creating more jobs," said Yoo, who also doubles as the deputy prime minister for economic affairs.

"The government will also put in constant effort to control rising household debt and stave off the impact of the U.S. Fed's decision."

The finance ministry will announce its fiscal stimulus package early next week, while experts anticipate that the plan will contain a supplementary budget and a cut in its growth target from 3.1 percent. (Yonhap)