South Korea said on Saturday plans to help the local construction industry avoid a drastic decline were on track, but reiterated concerns about the impact of cooling construction spending on the economy.
The finance ministry said in a statement issued after a regular ministerial meeting that the government would ensure the budget expenditure on construction projects was implemented as early as possible.
In July the government unveiled steps to usher in a soft landing for the construction industry, which accounts for about a tenth of the country's annual gross domestic product, although it stopped short of promising huge additional fiscal spending.
Construction investment in the first half of this year was only 3.9 percent higher than a year before, compared with growth of 7.6 percent in 2003 and 5.3 percent in 2002, the construction ministry said in a separate statement.
Making the situation worse, domestic construction orders during the second quarter fell 27.7 percent from a year earlier, following a 14.2 percent drop for the first quarter, the construction ministry said.
South Korea's economy, the third-largest in Asia, is grappling with increasing risks of cooling exports and depressed consumer spending, while heavy debt among households and firmer oil prices add to the problems.
The government expects this year's economic growth to top 5 percent, following a 3.1 percent rise in 2003, but investment banks and research houses have recently cut their forecasts for economic growth to below 5 percent.
The finance ministry said the country would be able to achieve its target of winning $10 billion in foreign direct investment this year. It did not elaborate.