South Korea unveiled on Thursday a US$40 billion stimulus package to help boost the nation’s economy, as data showed a slowdown in GDP growth amid a drop in private consumption.
Choi Kyung-hwan, the country’s recently-appointed finance minister, promised a package of stimulus measures worth a total of 40.7 trillion won, of which 21.7 trillion won will be invested by the end of this year, Financial Times reported.
New policies include a relaxation of rules on mortgage lending, allowing higher ratios of debt to borrower income and loan to property value, the report said.
The announcement came the same day as data showed the nation’s gross domestic product growth slowed to 3.6 percent from a year earlier in the second quarter, from 3.9 percent in the preceding three months.
The figures bore out warnings about a hit to consumer sentiment from April’s Sewol ferry disaster, with private consumption falling 0.3 percent from the prior quarter, FT noted.
Following the weak second-quarter data, the government lowered the GDP forecast for the full year. The finance ministry now expects growth this year to come in at 3.9 percent, against the previous estimate of 3.7 percent.
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