Korea is trying to cushion impacts of the looming euro zone crisis with economic support measures worth 8.5 million won ($7.4 billion), Bloomberg reports.

According to The Korea Herald, the Finance Ministry lowered forecasts for the nation’s economic growth from estimates of 3.5% to 3.3%, nodding to IMF and OECD earlier predictions. The ministry said that Korea is likely to experience a gradual economic recovery next year.

Kim Nam Hyun, a Seoul-based fixed income analyst at Eugene Investment & Futures told Bloomberg that “the European debt crisis is such a big challenge that South Korea will have to struggle to meet even the lowered growth target”. The additional spending should stimulate GDP growth by 0.25% per annum by promoting investments and assisting small businesses and low-income earners.

Employment rates will also increase by 400,000 year-on-year as demand for health care workers grows. Consumer prices growth will remain at 2.8%, lower than the expected 3.2%, according the the ministry.

Despite external threats and weak growth momentum,  South Korea’s economy “is fairing well given deteriorating external conditions,” said the Finance Ministry’s director-general, Choi Sang Mok.