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S. Korea to spend over 13.5 bln USD to stimulate economy after MERS outbreak

Xinhua, June 25, 2015 Adjust font size:

South Korea's Finance Ministry said on Thursday that it would spend more than 15 trillion won (13.5 billion U.S. dollars) to stimulate the economy hit by the outbreak of Middle East Respiratory Syndrome (MERS).

The stimulus package included a supplementary budget plan, but the size of the extra budget would be decided upon in early July after consulting with lawmakers, according to the second-half economic policy direction.

Finance Minister Choi Kyung-hwan said that it would be hard to reach a 1-percent growth rate, the government's earlier forecast, in the second quarter on a quarterly basis due to the MERS outbreak.

It would mark the below-1-percent growth for six straight quarters, which fueled worries about the prolonged trend of low growth, Choi said, adding that such concerns led the government to take stimulus measures.

The MERS infections increased to 180 on Thursday since the first case was reported on May 20. The death toll rose to 29 as two more patients died.

The economy was damaged by the MERS fears as consumers refrained from entertainment and social gatherings and even delayed shopping. Tens of thousands of foreign tourists canceled travel plans to South Korea amid the unabated epidemic.

The government plans to increase fiscal funds for local governments as the MERS spread nationwide and hit the local economies. To boost exports, public trade finance would be provided for exporters.

Detailed supplementary budget plan would be submitted to the parliament next month. If the extra budget bill is passed, it would mark the second since the Park administration took office in February 2013. Endi