Hit by a lengthy US-China trade war and a cyclical slump in the memory chip sector, Korea's economy is poised to report its weakest annual growth in a decade this year.

Hong said the government will make "innovative efforts" to increase the nation's potential growth rate.

Signs of easing trade tensions between the United States and China and an anticipated upturn in the global memory chip market are expected to help South Korea achieve the growth target next year, Hong said.

As part of the government's initiative to boost the economy through investment, state-run institutions will expand next year's investment to 60 trillion won ($51.6 billion) from 55 trillion won for this year.

Also, the government will encourage private firms to spend 25 trillion won in large-scale investment projects.

As part of efforts to help their financing, the government will provide financial support worth more than 10 trillion won, including 4.5 trillion won worth of low-rate loans, for companies' facility investment.

Hong said the government will encourage private companies to boost their facility spending next year through various policy measures.

Earlier this month, the National Assembly approved next year's state budget of 512.3 trillion won, up 9.1 percent from this year's.

The ministry said it will allocate about 62 percent of the 2020 budget in the first half of next year to prop up the slowing economy.

In a statement, Vice Finance Minister Koo Yun-cheol said the government's spending package should play a "pump-priming" role to spur economic growth.

The government will draw up measures to restructure its spending plans to maintain the soundness of its expansionary budget, Koo said. (Yonhap)