Citing sluggish domestic demand in the wake of a devastating ferry disaster in April, the finance ministry cut its forecast for economic expansion in 2014 to 3.7 from 4.1 per cent.
The stimulus plan of
The lion's share will be spent in the remainder of this year, with
"Our economy now stands at a critical crossroads between making a leap forward and falling into a recession," Finance Minister
The government also said it would ease mortgage rules and provide tax benefits for businesses that use their cash reserves for wages and dividends in order to spur economic activity.
"We will run our fiscal stance in an expansionary manner during the second half and in 2015 so as to consolidate the base for economic recovery," the ministry statement said.
The stimulus package was announced just hours after the central Bank of
Gross domestic product rose a seasonally adjusted 0.6 per cent in the April-June period from the previous quarter, the bank said.
It was the slowest growth since the first quarter of 2013 and missed market expectations of around 0.7 per cent.
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