The South Korean government on Friday agreed to inject $20 billion into the flagging economy, which has been hit by the MERS virus outbreak and sluggish consumption.
The 22-trillion-won ($19.8 billion) stimulus package was passed at a cabinet meeting of government ministers, the finance ministry said.
"The extra budget will help revitalise the economy and stabilise the livelihoods of ordinary people who have been affected the most by the fallout from MERS," Vice Finance Minister Bang Moon-Kyu was quoted as saying by Yonhap news agency.
As of Friday morning, the virus had killed 33 people and a total of 184 cases had been confirmed. Forty-two of those remain hospitalised with 12 in critical condition, according to the health ministry.
The 22 trillion won package includes an already-announced 15 trillion won supplementary budget and seven trillion won of other expenditures such as expanded investments by state companies and additional credits for exporters.
The extra expenditure is expected to raise the economic growth rate by 0.3 percentage points this year and 0.4 percentage points in 2016.
South Korea forecasts its economy will grow 3.1 percent this year and 3.5 percent next year.
Despite lingering fears over MERS, the country is hosting two international sporting events this week -- the World University Games in southern Gwangju City and the ITTF World Tour Korea Open in the western city of Incheon.
Scores of thermo heat sensing cameras have been installed at airports, athletes' villages, sports venues and hotels, with some 600 medics monitoring participants.
Nevertheless, some athletes have pulled out with a third of Hong Kong's 100-strong team opting to stay at home after the southern Chinese city issued a South Korea travel warning to its citizens.