Korea lays out US$10.5 bill. extra budget plan to boost growth, deal with MERS

Korea has unveiled a multi-billion dollar
supplementary budget plan to boost the nation′s slowing economic growth and to help the country
deal with the fallout from the MERS outbreak and the ongoing drought.
Shin Se-min reports. The Korean government will inject 19-point-five
billion U.S. dollars worth of stimulus funds into the flagging economy in the second half
of the year as it aims to hold the country′s economic growth rate in the three percent
range. Of that, ten-and-a-half billion U.S.
dollars of supplementary budget has been set aside to deal with Korea′s most pressing
issues. ″The extra budget should breathe fresh life
into the economy and stabilize the livelihoods of ordinary people who have been affected
the most by the MERS outbreak. It should also prevent a sharp drop in consumer spending.″
Of the supplementary budget,… five-point-five billion dollars will be directly spent to
counter losses from the MERS outbreak and the ongoing drought.
The remaining five billion goes to cover tax revenue shortfalls caused by the slow economy.
The extra budget plan is estimated to raise the economic growth rate by zero-point-three
percentage points this year and zero-point-four percentage points in 2016. ″The timing and amount of the budget seems
sufficient to quickly put the economy back on the recovery track as its main role is
to deal with the most pressing matters.″ The ministry says it plans to sell eight-and-a-half
billion dollars worth of new treasury bonds to fund the supplementary budget,… causing
some analysts to say it could negatively impact Korea′s fiscal soundness.
The government plans to hand the supplementary budget to the National Assembly next Monday.
It aims to have the budget approved by July 20th so the funds can be released in early
August. Shin Se-min, Arirang News.

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