South Korea on Friday finalized supplementary budget plan for the second half at 11.8 trillion won (10.5 billion U.S. dollars) to boost the lackluster economy caused by sluggish exports, a long spell of drought and the outbreak of Middle East Respiratory Syndrome (MERS).
A total of 5.6 trillion won was earmarked for the expected lack of tax revenue caused by economic slowdown, and 6.2 trillion won was allocated to counter the negative effect of the MERS outbreak and dry weather by spending more fiscal funds, according to the Ministry of Strategy and Finance.
The fiscal spending plan came as the MERS outbreak hit hardest the overall industrial activity, especially tourism and service industries, as consumers refrained from outside activity and consumption for infection fears.
The long spell of dry weather sharply raised prices of farm goods, especially vegetables, and damaged profits of farmers.
The country's exports declined for six straight months through June, boosting worries about the economic slump as exports account for about half of the economy.
In addition to the extra budget, 9.9 trillion won would be spent in the second half by expanding financial support in the form of loans to exporters, investment by public corporations and spending by public funds.
The ministry expected the fiscal spending plans to lift the economic growth rate by 0.3 percentage points in 2015 and 0.4 percentage points in 2016.
