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[SEOUL] South Korea will draw up a supplementary budget expected to exceed 10 trillion won (S$12.1 billion), to help cope with the effects of the Mers outbreak and a economic slump, a ruling party official said on Wednesday, Yonhap News Agency reported. "The government has told us 5 trillion won of the budget will be used to make up for tax deficits, while 5 trillion and some more will be for extra spending," Saenuri Party floor leader Yoo Seung-min was quoted as saying.
Reuters confirmed Mr Yoo’s comments with an aide, who asked not to be identified as he was not authorised to speak to media.
Mr Yoo said a meeting will be held with government officials early on Thursday to discuss the budget and economic policies for the second half of this year. The finance ministry will release its revised economic forecasts on Thursday as well as its policy direction for the rest of 2015. “Regarding the additional budget, the government has not prepared a precise list on where the extra spending will go. It’s dangerous to confirm the size of the budget when that list has not been made available yet,” Mr Yoo said at the Saenuri meeting, according to comments published on the party’s website.
The government confirmed 4 new cases of Mers on Wednesday, bringing the total number of cases to 179.
The virus outbreak has claimed 27 lives, and fear over contracting of Mers has kept South Koreans at home or away from shops – a blow to the service industry and overall domestic consumption.
Bank of Korea Governor Lee Ju-yeol said earlier in the day that the declines in economic indicators linked to Mers are easing, but sluggishness in service industries is expected to persist for a considerable time.
Mr Lee also said it was important for South Koreans to continue with their lives and build recovery in consumer and investment sentiment.