South Korea cuts growth outlook, plans stimulus

South Korea's government says growth in Asia's fourth-largest economy will be lower than expected as the global economy faces heightened uncertainty.

Finance Ministry said Tuesday South Korea's economy will likely expand 2.8 percent this year, down from its December prediction of 3.1 percent.

The government said global conditions for exports, South Korea's key growth engine, have deteriorated. The International Monetary Fund cut in April its outlook for the world economy and trade.

At home, the government expects that companies will sharply lower their capital expenditures as sluggish exports continue. Corporate restructuring at cash-strapped shipbuilding and other industries could hurt job markets and corporate spending, it said.

The government plans a 10 trillion won ($8.5 billion) supplementary budget to support big projects that would fuel job creation.