Seoul, South Korea
In an effort to boost consumer spending amidst slowing exports, South Korea has announced a new round of stimulus package worth 5.9tn won ($5.2bn).
The country's Ministry of Finance said it would unleash 4.6tn won of the package for the remaining months of the year and another 1.3tn won in 2013.
The new fiscal support comes after a 8.5tn won stimulus in June, although the latest package will not strain the current budget since it will comprise of tax breaks on household incomes and spending on home purchases and automobiles.
Capital gains taxes will be waived for five years for purchases of newly built homes this year. This move aims to boost the softening real estate market, according to the ministry.
The plan also reduces individual consumption taxes for purchases of cars and home appliances until the year's end. Taxes will be reduced by 1.5 per cent to 3.5 per cent for smaller cars and to 6.5 per cent for larger cars. Duties will also be reduced to 3.5 per cent for home appliances.
Back in June, South Korea revised down its gross domestic product (GSP) forecast for the whole year to 3.3 per cent from its earlier estimate of 3.7 per cent, citing a slowdown in exports.
Weak demand for South Korea's exports is driven by slowing economic growth in the U.S. and Europe. Exports account for almost half of the country's GDP.
The ministry said it hopes the new stimulus package will boost economic growth by 0.06 per cent in 2012 and 0.10 per cent in 2013.
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