Seoul injects $19b to spur recovery of Mers-hit economy
SOUTH Korea yesterday announced a US$14 billion (S$19 billion) stimulus package to boost its troubled economy, hammered by the deadly Middle East respiratory syndrome (Mers) outbreak which has dented consumer spending and business sentiment.
In announcing the 15 trillion won programme - which follows a central bank interest rate cut to a record low this month - the Finance Ministry also slashed its growth outlook for this year.
Finance Minister Choi Kyung Hwan said the move was crucial as a recovery in Asia's fourth-largest economy hinged on efforts to quickly contain the effects of Mers.
As of yesterday, the virus had killed 29 people and infected 151 since the first case was confirmed on May 20, making it the worst outbreak outside Saudi Arabia.
"We can say that we have overcome the Mers crisis only if our economy rebounds," Mr Choi said, warning that growth could come in below 3 per cent without support from the extra spending.
"The economy is being weighed down by Mers, which has seriously hurt consumption and the service sector," he said, adding the government would use all available resources to prop up growth, support exports and create jobs.
The Finance Ministry slashed its growth forecast for this year to 3.1 per cent from an earlier projection of 3.8 per cent.
Yesterday, the Health Ministry reported two more deaths from Mers and one new case.