Page last updated at 07:04 GMT, Monday, 3 November 2008

South Korea in $11bn economy plan

A South Korean man looks at a stock index board at the Korea Exchange in Seoul
Uncertainty over the economy has caused market volatility

South Korea has announced an economic package worth around 14 trillion won ($10.9bn; 6.6bn) to boost the economy.

The stimulus plan, announced by the Ministry of Strategy and Finance, is meant to help avert a recession.

Eleven trillion won is aimed at public projects and three trillion won is for tax cuts to encourage spending.

Recent figures indicated that South Korean's third quarter economic growth reached a three-year low, as a wider global slowdown hit exports.

In light of the global slowdown the finance ministry said: "The Korean government proposes policy measures to cope with these unprecedented challenges by announcing pre-emptive, decisive and sufficient counter measures".

The government, amid fears of a repeat of the 1997-98 Asian economic crisis, has been taking steps to increase liquidity.

On Thursday South Korea signed a currency swap deal with the US Federal Reserve, valued at $30bn.

And the country recently reduced its interest rate to 4.25% from 5% during an emergency meeting as a fillip to the economy.

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SEE ALSO
Country profile: South Korea
23 Oct 08 |  Country profiles
South Korea cuts rates to 4.25%
27 Oct 08 |  Business

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