SEOUL, July 3 Reuters South Korea39;s government on Wednesday vowed to support small businesses and the construction sector struggling due to high interest rates in the second half of 2024, as it revised up its forecast for this year39;s economic growth.

Small businesses are still in difficult conditions. Amid persistently high interest rates, their interest burden has increased, while wage and rent costs are also rising, President Yoon Suk Yeol said in a speech ahead of the government39;s biannual economic policy announcement.

The government has prepared a total of 25 trillion won 18 billion worth of support measures, Yoon said.

In its biannual economic policy agenda, the finance ministry forecast the economy would grow 2.6 in 2024, up from 2.2 seen in January. In 2023, the economy expanded by a threeyear low of 1.4.

Economic growth will be led by exports, particularly of semiconductors, amid rising demand related to artificial intelligence, the ministry said. For 2025, it projected economic growth at 2.2.

For small businesses and the selfemployed, the government will provide policy loans with extended repayment periods and lower interest rates, while seeking policy measures to lower fixed costs, such as rents and utility fees, the ministry said.

The government will expand financial support for small businesses by 1 trillion won 721.8 million in the second half to help them pay utility costs, interests and wages, it added.

On inflation, the ministry kept its…