SEOUL, April 24 (Xinhua) -- South Korea's government on Wednesday announced this year's supplementary budget plan worth 6.7 trillion won (5.9 billion U.S. dollars) to tackle air pollution and export fall.
The ministry of economy and finance said in a statement that 4.5 trillion won (3.9 billion U.S. dollars) was earmarked to stimulate the slowing economy, caused by export reduction, while 2.2 trillion won (2 billion U.S. dollars) was for battling fine dust pollution and securing the safety of people from national disaster.
It was forecast to raise the country's economic growth rate this year by 0.1 percentage point, creating about 73,000 jobs and reducing some 7,000 tons of fine dust.
The government set its growth target for 2019 at a range of 2.6-2.7 percent, but the outlook dimmed as the export, which accounts for about half of the export-driven economy, declined for the fourth consecutive month to March.
South Korea's Finance Minister Hong Nam-ki, who doubles as deputy prime minister for economic affairs, said the supplementary budget was announced to preemptively address the economic slump and air pollution, but he noted that additional stimulus measures would be needed to meet the growth target.
The finance ministry planned to submit the extra budget bill to the National Assembly on Thursday. It requires parliamentary approval.
The South Korean government unveiled extra budget plans for the fifth consecutive year. It was the third such plan under the Moon Jae-in administration, which was inaugurated in May 2017.
The supplementary budget would be financed through residual and surplus funds of 3.1 trillion won (2.7 billion U.S. dollars) and the issuance of treasury bonds worth 3.6 trillion won (3.2 billion U.S. dollars).
The treasury bond sale was not expected to cause a problem with the country's fiscal soundness as the government reduced bond sales last year on the larger-than-forecast tax revenue and the prepayment of a part of government debts, according to the finance ministry.
The extra budget came amid a growing worry about the country's economic slowdown, caused by the export fall.
The Bank of Korea (BOK) lowered this year's growth forecast for the economy to 2.5 percent earlier this month from 2.6 percent estimated three months earlier.
Global credit rating companies Moody's and Standard & Poor's also revised down their growth outlooks for South Korea this year to 2.1 percent and 2.4 percent respectively.
The International Monetary Fund (IMF) recommended last month that the South Korean government should earmark about 9 trillion won (7.9 billion U.S. dollars), or 0.5 percent of the gross domestic product (GDP), for supplementary budget to achieve the government's growth target of 2.6-2.7 percent.
However, this year's extra budget proposal was far below the IMF's recommended amount, leaving worry about the weaker-than-expected economic growth this year.
As rival parties were at odds over the amended election law ahead of the parliamentary election a year later, it was hard to pass the supplementary budget bill through the National Assembly.
The delayed passage of the extra budget bill could weaken the positive effect of an expanded fiscal expenditure on the lackluster economy.
Production in all industries fell 1.9 percent in February from a month earlier. Output in the mining and manufacturing sectors dipped 2.6 percent, with those among services firms and builders skidding 1.1 percent and 4.6 percent each.
Retail sales, which reflect private consumption, slipped 0.1 percent in the month, with facility investment sliding 1.9 percent.
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