[Aju News DB]
South Korea on Wednesday unveiled an additional first-quarter fiscal spending of 21 trillion won (17.4 billion US dollars) to shore up its fragile economy.
The Ministry of Strategy and Finance said it would add six trillion won to 138 trillion won in fiscal spending earmarked for the January-March period, including educational expenditures.
The ministry also pledged an additional 15.5 trillion won in policy financing in the first first quarter.
As a result, the government will frontload more than 40 percent of its 330.6 trillion won budget for 2016 in the first quarter, up 10 percentage points from its earlier plan, it said.
Deputy Finance Minister Lee Chan-woo said the government's new stimulus package would help push up economic growth by 0.2 percentage point and meet an earlier growth target of 3.1 percent.
The ministry said a consumption tax cut program on passenger cars would be extended from December 1. Excise taxes on cars will be lowered to 3.5 percent from 5.0 percent during the first half.
The move comes as unfavorable external factors such as weak domestic consumption, a slowdown in China and falling oil prices weigh heavily on the economic recovery in Asia's fourth-largest economy.
South Korea's annual inflation rate cooled to its lowest in four months in January, and annual exports in January slumped over 18 percent, the sharpest fall since the depths of the global financial crisis in 2009.
Analysts said the grim data may force the central Bank of Korea into easing policy once again, although few expect it to act at the next meeting scheduled for February 16. The country’s base rate is currently at a record-low 1.50 percent.
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reporter
Park Sae-jin
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