The government and the ruling Saenuri Party agreed Wednesday to draw up an extra budget worth around 15 trillion won ($13.4 billion) as Asia's fourth-largest economy, already reeling from slackened domestic demand and falling exports, is feared to further lose recovery momentum amid the MERS fallout.
  
The supplementary budget plan will be submitted to the parliament for approval on Monday, ruling party officials said. The two sides also agreed to pass it by July 20.
  
The extra money will come from unused budget left over from last year, with shortfalls to be covered by issuing state bonds, they said.
  
"The issuance of state bonds will be kept to a minimum while every effort will be made to maximize the effects of the budget," said Rep. Kim Sung-tae of the Saenuri Party, who participated in the government-ruling party meeting.
  
The measures came as the local economy, faced with feeble domestic demand and weak exports, has been hit hard recently by the MERS outbreak, which has made a big dent in consumer spending and battered some industries such as tourism.
  
Since the first confirmed case in late May, 33 people have died from complications caused by the acute respiratory illness, with 182 confirmed to have contracted the virus.
  
During the meeting, Finance Minister Choi Kyung-hwan said that every effort is being made to forward the government's extra budget plan as soon as possible.
  
"The goal is to get the money as quickly as possible to people that need it the most," the country's top economic policymaker said.
  
Seoul has cut its growth outlook on the Korean economy as MERS woes continued to weigh down the local economy since the first case was reported on May 20. Last week, the finance ministry slashed its forecast for the year to 3.1 percent from 3.8 percent.
  
Data issued earlier in the day showed that the country's outbound shipments continued to shrink in June, marking the sixth consecutive month the country has posted an on-year drop in its exports.
  
The extra budget will also be used to alleviate the effects of the current drought, according to the party officials.
  
The country remains gripped by the worst drought in more than a century, which is feared to hit agricultural production hard and bump up food and other consumer prices. (Yonhap)