South Korea tips fastest growth in three years in 2017

People walk on a zebra crossing in front of the building of Bank of Korea in Seoul,

South Korea, July 14, 2016. Photo by Reuters/Kim Hong-Ji

South Korea said Tuesday its economy is set to grow at its fastest rate in three years in 2017, on the back of strong exports and a $10 billion stimulus package aimed at creating jobs and bolstering welfare.

South Korea has enjoyed a decades-long boom, but expansion has slowed more recently and economic and social frustrations were among the drivers of left-leaning President Moon Jae-In's election in May.

The finance ministry raised its forecast for Asia's fourth-largest economy, saying gross domestic product was expected to expand by 3.0 percent -- up 0.4 percentage points from an earlier projection in December.

The forecast for 2017 marks the strongest projected growth of the South Korean economy since GDP expanded by 3.3 percent in 2014.

Authorities also cited a recovery in the country's exports for the improved outlook as the global economy rebounds.

"We believe the 3.0 percent growth will be possible if the economy continues to undertake reforms for consumption-led growth," deputy finance minister Lee Chan-Woo told reporters.

The tweaked forecast comes after the government passed a giant stimulus package over the weekend promising 110,000 new jobs in response to record-high youth unemployment.

Unemployment among under-30s hit 11.2 percent in April, more than double the rate for the entire working population.

Economic frustrations were among the factors that fuelled mass anti-corruption protests that saw former president Park Geun-Hye impeached and arrested over corruption.

Among the new jobs being targeted are firefighters, police, assistant teachers and social workers, while young job seekers, small businesses and tech startups will also be helped.

Financial assistance will be increased for women on maternity leave, more daycare centers and nursing homes for the elderly are to be opened, and businesses hiring more full-time workers are to be given extra funding.

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