All about business

South Korea plans to reallocate money from this year's budget to develop subway stations and create more jobs in a move to spur economic growth.

The government will divert 2.5 trillion won ($2.5 billion) from this year's planned budget for the projects, the Finance Ministry said in a statement in Gwacheon.

The announcement comes less than a week after the Grand National Party won a majority in a legislative election, giving President Lee Myung Bak the power to push through policies to lift growth. Lee said April 13 that domestic demand may shrink and the government will encourage companies to invest more.

“It's a positive move that the government is looking to do something to help the domestic economy,'' said David Kim, an economist at Woori Investment & Securities Co. in Seoul. “Export growth is likely to slow so South Korea needs a boost from domestic demand.''

The plans include 272.6 billion won to rebuild a Seoul train station that's more than 20 years old. The government will also build escalators and elevators in 25 subway and train stations to improve access for disabled and elderly commuters.

“We will use the money saved from other projects on new initiatives that will help stimulate the economy and stabilize people's lives,'' the Finance Ministry said http://payday-z.com.

Lee's Pledge

Lee, who won the presidency in December on a pledge to boost growth and income, said he will “accelerate the process so companies can invest freely, create more jobs and stimulate the economies of ordinary people.''

Evidence is mounting that the economy's nine-year expansion is slowing: consumer confidence fell to a one-year low in March, retail sales growth eased in February and factory production declined for a second month.

Rising costs of food and energy have stoked inflation in Asia, eroding companies' profits and households' disposable income. Economies across the region are bracing for a slowdown amid concerns that a U.S. recession will crimp overseas sales.

Lee promised to increase South Korea's growth to 7 percent and double per capita income to $40,000 by 2017. The economy expanded 5 percent last year and the government aims for growth to quicken to about 6 percent in 2008.

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