SEOUL - South Korea yesterday announced a US$14 billion (S$19 billion) stimulus package to boost its troubled economy, hammered by the deadly Middle East respiratory syndrome (Mers) outbreak which has dented consumer spending and business sentiment.

The authorities have also ordered hospitals to track all emergency ward visitors, after the outbreak was blamed on difficulties in locating every person exposed to the disease, the Health Ministry said yesterday.

In announcing the 15 trillion won programme - which follows a central bank interest rate cut to a record low this month - the Finance Ministry also slashed its growth outlook for this year.

Finance Minister Choi Kyung Hwan said the extra move was crucial as a recovery in Asia's fourth largest economy hinged on efforts to quickly contain the effects of Mers.

As of yesterday, the virus had killed 29 people and infected 151 since the first case was confirmed on May 20, making it the worst outbreak outside Saudi Arabia.

"We can say that we have overcome the Mers crisis only if our economy rebounds," Mr Choi said, warning that growth could come in below 3 per cent without support from the extra spending.

"The economy is being weighed down by Mers, which has seriously hurt consumption and the service sector," he said, adding that the government would use all available resources to prop up growth, support exports and create jobs.

Mr Choi said the government would issue bonds to fund the extra budget, the size of which will be decided after analysing the impact of Mers.

The Finance Ministry slashed its growth forecast for this year to 3.1 per cent from an earlier projection of 3.8 per cent. The slowing global economic recovery and a weak yen and euro are other risks to South Korea, it said. As part of the stimulus package, provincial authorities will be encouraged to spend more on infrastructure projects, while it will also be used to help contain Mers, address the effects of a severe drought and create more jobs.

Yesterday, the Health Ministry reported two more deaths from the disease, taking the toll to 29, besides reporting one new case.

The difficulty of tracing those who thronged the wards made it harder to find people who needed to be isolated, ministry official Kwon Deok Cheol said. Hospitals are now required to keep a record of all patients and family members as well as ambulance workers and the time of their visits.

Most of the deaths have been among elderly patients or those already suffering illnesses. There are 77 people still being treated in hospitals.

AGENCE FRANCE-PRESSE, REUTERS