World Economy

S. Korea to Increase Budget by $9 Billion

S. Korea to Increase Budget by $9 BillionS. Korea to Increase Budget by $9 Billion

South Korea on Friday outlined an 11 trillion won ($9.64 billion) extra budget plan designed to prop up its economy facing sluggish exports and a possible fallout from corporate restructuring in key industries.

It is part of the government’s 28 trillion won economic stimulus package aimed at helping Asia’s fourth-largest economy achieve 2.8% growth this year, which was downgraded last month from an earlier 3.1%, Yonhap reported.

Passed by the cabinet, the supplementary budget will be submitted to the national assembly on Tuesday next week as the government hopes that the parliament will give approval around Aug. 12, so the funds can be released before September.

“We have been going through corporate restructuring as part of our efforts to steer the economy to a more advanced one. At the same time, we are experiencing rising unemployment in the young generation and escalated financial uncertainties stemming from the Britain’s exit from the European Union, or Brexit,” Vice Finance Minister Song Eon-seog said in a prior press briefing in Sejong.

“The government has come up with the extra budget plan to deal with the tight job market.”

The government’s extra spending came as ongoing strict restructuring efforts in the shipbuilding and other shaky sectors weighed heavily on the local job market and the entire economy, as key indicators are showing that it is still in the doldrums.

South Korea’s exports, one of the core economic drivers, fell 10% on-year in the January-June period, posting the 18th consecutive negative growth at the same time. Outbound shipments fell 2.7% in June, with exports of key items, like cars, machinery and petroleum products, marking negative growth last month.