July 19, 2018 / 12:49 AM / a month ago

S.Korea's extra fiscal spending, tax cuts could add 0.1 pct pt to 2018 growth - officials

SEOUL, July 19 (Reuters) - South Korea’s 4 trillion won ($3.54 billion) of extra fiscal spending and tax cuts announced this week is expected to boost economic growth by 0.1 of a percentage point this year, two finance ministry officials said on Thursday.

South Korea said on Wednesday it will boost spending on infrastructure projects to boost jobs and shore up domestic spending, and cut the nation’s growth forecasts to 2.9 percent.

The finance ministry also said it would lower individual consumption tax imposed on diesel cars.

“The two measures will add 0.1 of a percentage point to this year’s growth,” one of the two officials told Reuters, declining to be named as he is not entitled to speak to media. “Still, an escalation of trade tensions or job market shocks caused by the minimum wage hikes could hurt growth.” ($1 = 1,130.4000 won) (Reporting by Hayoung Choi, Shinhyung Lee; Editing by Sam Holmes)

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