SEOUL - SOUTH Korea plans to cut jobs at state-run companies and sell their idle assets, the finance ministry said on Sunday, as the country is on track to posting a fiscal deficit representing 2.4 per cent of its gross domestic product next year.

The finance ministry said in a statement that 69 state-run companies, such as power monopoly Korea Electric Power Corp (Kepco) , would slash some 19,000 employees, about 13 per cent of their combined workforces in the next 3-4 years.

Kepco will cut 2,420 people, 11.1 per cent of its total employees, and the Korea Development Bank (KDB) plans to shed 237 jobs, 10 per cent of the state-run bank's workforce.

The job cuts, along with other cost-reduction plans, will enable the country to save 1.7 trillion won (S$1.94 billion) of the government budget, the ministry said.

The state-owned companies also plan to sell assets, including land, which are not directly related to their business, and raise 8.5 trillion won, the ministry said.

The ministry said the government would consider selling stakes in other companies, which the state-run firms own.

South Korea will spend a total of 284.5 trillion won in 2009, up 10.6 per cent from this year, which will leave the country's fiscal deficit at 24.8 trillion won next year.

The government plans to beef up its spending on social infrastructure and smaller firms next year as Asia's fourth-largest economy is feared to grow by the slowest pace since the 1997-98 Asian financial crisis. -- REUTERS