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(LEAD) S. Korea to spend over 60 pct of budget in 1st half: finance minister

All News 09:46 January 08, 2020

(ATTN: ADDS remarks, details in last 4 paras)

SEOUL, Jan. 8 (Yonhap) -- Finance Minister Hong Nam-ki said Wednesday that 62 percent of the state budget will be implemented in the first half of this year as South Korea seeks to revitalize the economy through large-scale investment projects.

In particular, the government will spend 37 percent of the budget for job creation in the first quarter, Hong said in a meeting with economy-related ministers earlier in the day.

"This year, the government will do its best to swiftly implement budget spending to support the economy," Hong said.

Finance Minister Hong Nam-ki speaks at a meeting with economy-related ministers on Jan. 8, 2020. (Yonhap)

Finance Minister Hong Nam-ki speaks at a meeting with economy-related ministers on Jan. 8, 2020. (Yonhap)

South Korea's economy is expected to grow 2.4 percent this year, following last year's estimated 2 percent expansion, on the back of an anticipated recovery in the memory chip sector and a series of policy measures.

Hit by a lengthy U.S.-China trade war and a cyclical slump in the memory chip sector, the nation's economy is poised to report its weakest annual growth in a decade last year.

As part of the government's initiative to boost the economy through investment, state-run institutions will expand next year's investment to 60 trillion won (US$51.4 billion) from 55 trillion won for this year.

Also, the government will encourage private firms to spend 25 trillion won in large-scale investment projects.

Military tensions in the Middle East have been sharply rising since last week's killing of Gen. Qassem Soleimani, arguably Iran's most powerful commander, by a U.S. air strike.

Hong said the government has strengthened its monitoring of financial markets amid volatility over heightened tensions between the U.S. and Iran.

"In the case of any abnormal situation, the government will cope with the situation in line with contingency plans," Hong told the meeting.

South Korea has said it will consider releasing oil from its strategic oil reserves if there is a crisis on securing oil supplies amid escalating tensions in the Middle East.


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