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BREAKING NEWS

South Korea tells state firms to boost spending as economy slows

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SEOUL (Reuters) – South Korea’s government told state enterprises on Wednesday to spend 1 trillion won (671.7 million pounds) more than they had planned for the rest of the year to support cooling private sector activity.

Finance Minister Hong Nam-ki told heads of the country’s 137 state-owned organisations at a meeting to increase their investment by 1 trillion won this year to prop up the economy, taking total investment for the year to 55 trillion.

This means public enterprises now have to boost their spending by some 6% for the rest of the year as Asia’s fourth-largest economy is widely expected to miss the government’s recently downgraded growth target this year.

The government has a 2.4-2.5% growth target for this year but global investment banks see growth tumbling to as low as 1.4% from 2.7% last year, one of the worst in half a century.

(Reporting by Choonsik Yoo; Editing by Sam Holmes)

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