SEOUL - SOUTH Korea's President Lee Myung Bak will on Monday launch an economic 'war room' to co-ordinate a strategy to help the country out of the global financial downturn.

The Emergency Economy Situation Room will be based in the heart of the president's office, spokesman Lee Dong Kwan said, adding it will produce daily assessments on the economy as it faces 'an unprecedented crisis'.

The war room is to be overseen by a special council that is tasked solely with overcoming the crisis and will be chaired by Mr Lee.

The council, attended by top policy makers including the central bank chief, will meet at least once a week to work out economic policies and government measures, the spokesman said.

The war room will be based in an underground bunker, built in case of conflict with the North, in a bid to show people the government is working hard to overcome the crisis.

In his New Year policy address, President Lee promised to bolster the slumping economy, giving priority to easing a credit crunch.

He also said the government would ease regulations and cut taxes to encourage investment while spending 60 per cent of the 2009 budget in the first half of the year.

The government has cut its 2009 growth forecast by one percentage point to three per cent as exports shrink and the domestic economy stays sluggish.

Mr Lee has said the economy could shrink in the first half of this year for the first time since the 1997/98 Asian financial crisis. -- AFP