South Korea cuts economic growth forecast and plans stimulus as MERS hits spending

Economic IndicatorsAssociated Press

South Korea's finance ministry says economic growth will slow this year as the outbreak of Middle East respiratory syndrome saps spending and tourism.

The ministry on Thursday cut its forecast for South Korea's growth this year to 3.1 percent from 3.8 percent. Asia's fourth-largest economy grew 3.3 percent last year.

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The ministry said the MERS outbreak has derailed a recovery in consumption. Revenues at department stores plunged 30 percent during the first two weeks of June and more than 120,000 visitors cancelled trips to Korea.

The ministry said it is planning $13.5 billion of economic stimulus.