SK unveils US$15.3b stimulus plan
Source: Agencies |
April 17, 2013, Wednesday
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Print Edition
Print Edition
SOUTH Korea's government announced a US$15.3 billion stimulus plan yesterday to boost slowing growth in Asia's fourth-largest economy.
The stimulus would be South Korea's third-largest supplementary budget ever, exceeded only by those approved after the 1998 Asian financial crisis and the 2008 global financial turmoil when measured as a proportion of gross domestic product.
The Ministry of Strategy and Finance said the budget will add 0.3 percentage point to growth this year and create 40,000 new jobs.
A ministry statement said the budget will be used to cover a tax revenue shortfall, aid small and medium firms and boost the stagnant real estate market. It said it will submit the 17.3 trillion-won (US$15.3 billion) plan to parliament tomorrow.
The ministry estimated a tax revenue shortfall of 6 trillion won due to the slower economic recovery and another 6 trillion won shortfall from delays in selling stakes in state-owned banks. The remaining 5.3 trillion won will be a net rise in the government's budget.
In addition to the extra budget requiring parliamentary approval, the ministry will also use 2 trillion won in state funds that do not need to go through the assembly to stimulate the economy.
"The extra budget is aimed at finding growth momentum for South Korea's economy," finance minister Hyun Oh-seok said in a statement.
The stimulus plan comes after the ministry last month cut its forecast for South Korea's economic growth this year. It said South Korea's economy will expand 2.3 percent, instead of the 3 percent it had predicted three months earlier. The ministry blamed the yen's slide that is hurting South Korean exporters, weak consumer sentiment and sluggish capital investment.
The Bank of Japan's monetary easing measures that have cut the yen's value seek to help lift Japan's economy out of years of deflation.
The stimulus would be South Korea's third-largest supplementary budget ever, exceeded only by those approved after the 1998 Asian financial crisis and the 2008 global financial turmoil when measured as a proportion of gross domestic product.
The Ministry of Strategy and Finance said the budget will add 0.3 percentage point to growth this year and create 40,000 new jobs.
A ministry statement said the budget will be used to cover a tax revenue shortfall, aid small and medium firms and boost the stagnant real estate market. It said it will submit the 17.3 trillion-won (US$15.3 billion) plan to parliament tomorrow.
The ministry estimated a tax revenue shortfall of 6 trillion won due to the slower economic recovery and another 6 trillion won shortfall from delays in selling stakes in state-owned banks. The remaining 5.3 trillion won will be a net rise in the government's budget.
In addition to the extra budget requiring parliamentary approval, the ministry will also use 2 trillion won in state funds that do not need to go through the assembly to stimulate the economy.
"The extra budget is aimed at finding growth momentum for South Korea's economy," finance minister Hyun Oh-seok said in a statement.
The stimulus plan comes after the ministry last month cut its forecast for South Korea's economic growth this year. It said South Korea's economy will expand 2.3 percent, instead of the 3 percent it had predicted three months earlier. The ministry blamed the yen's slide that is hurting South Korean exporters, weak consumer sentiment and sluggish capital investment.
The Bank of Japan's monetary easing measures that have cut the yen's value seek to help lift Japan's economy out of years of deflation.
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