South Korea going for another fiscal stimulus package

The Finance Ministry of South Korea said yesterday that it is planning a KRW15trn (USD13.5bn) stimulus package to boost the economy.

Acording to Commerzbank, the main motivations of the stimulus are 

• 1) to offset the negative impact arising from MERS
  
  
• 2) counter the ongoing drought which is at its worst in nearly four decades

Details of the timing and breakdown of the package will be released in coming weeks.

The Finance Ministry downgraded 2015's growth forecast to 3.1% from 3.8% previously from 3.3% in 2014, notes Commerzbank. 2015 inflation was also slashed to 0.7% from 2% previously, with inflation hovering around a near 15-year low of 0.5% in recent few months. For USD-KRW, it is holding at the upper end of the 1100-1120 range of the past month.