“South Korea unveiled a 17.3 trillion won ($15.4 billion) supplementary budget to support exporters pressured by a weaker Japanese currency and revive an economy that grew last year at the slowest pace since 2009.
The package will boost growth by 0.3 percentage points and create 40,000 jobs, the Finance Ministry said in a statement in Sejong. The net increase is 5.3 trillion won after covering expected revenue shortfalls, the government said. Another 2 trillion won will be available for support measures from outside the budget, it said.
The government plan may boost consumption and confidence as China’s economy shows signs of weakness and NorthKorea’s Kim Jong Un ratchets up threats against the U.S. and the South. A stronger won, which has risen more than 21 percent against the yen in the past six months, has hindered export-reliant companies such as Hyundai Motor Co. (005380)and Samsung Electronics Co. (005930) by making their products more expensive overseas.
“The extra budget will lift up the recovery in the second half of this year, which is needed as sentiment has been weak,” said Jun Min Kyoo, a Seoul-based economist at Korea Investment & Securities Co. “The focus on job growth and exporters will boost private consumption.”
President Park Geun Hye’s government announced plans for a stimulus package on the same day last month it lowered its 2013 growth forecast to 2.3 percent from 3 percent. The government moved today after the Bank of Korea last week resisted pressure to cut the benchmark interest rate.
