SEOUL (AFP) - The South Korean government is preparing a huge "New Deal" spending package in the next few years to revive the country's sagging economy, Yonhap news agency said.
Some 10 trillion won (nine billion dollars) would be pumped into the stimulus package unveiled at a closed-door workshop attended by key economic officials and ruling party lawmakers, Yonhap said.
An expanded state budget and private funds are to finance new highways or housing planned over the next few years, it said.
Various government records will be pooled in databases to boost the information and technology industry in the stimulus package, reminiscent of the US "New Deal" economic initiatives in the 1930s.
Yonhap said the commerce, industry and energy ministry suggested a 7.2-trillion-won spending project while the information and communications ministry put forward a separate two-trillion-won plan during the seminar.
But officials declined to confirm the report, saying they have yet to finalize the package which will require more consultations between government agencies.
South Korea's economy is suffering a severe setback due to a sluggish domestic demand despite its brisk exports.
The Seoul government has forecast the country's economy would more than five percent this year, with the central Bank of Korea projecting 5.2 percent growth.
But Fitch Ratings last week slashed South Korea's economic growth forecast to 4.2 percent for this year while the International Monetary Fund lowered its 2004 growth estimate to 4.8 percent from 5.5 percent.
11/07/2004 - 13:02 GMT - AFP