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South Korea plans $13.5 billion stimulus to counter MERS outbreak

Staff writer |
South Korea is planning a stimulus package to counter potential economic slowdown that would stem from weak exports and the negative impact of the Middle East Respiratory Syndrome (MERS) outbreak.

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The finance ministry announced a $13.5 billion stimulus, which include an unspecified supplementary budget, and downgraded its growth and inflation outlook.

The ministry lowered its growth forecast for 2015 to 3.1 percent from 3.8 percent and inflation projection to 0.7 percent from 2 percent. The economy is forecast to expand 3.5 percent next year.

Exports are forecast to shrink 1.5 percent this year and imports to fall 7 percent largely due to falling oil prices. The current account surplus is seen rising to $94 billion this year.

The outbreak of disease in Asia's fourth-largest economy has reduced consumer spending and tourist arrivals amid drought in many areas.

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