South Korea says it will stay on the road of implementing expansionary fiscal policies to stimulate the economy.

Officials in Seoul have sought to increase the money supply with tax breaks and increased government spending, in order to prevent an economic slowdown from extending into a slump similar to Japan's "lost decade" of the 1990s.

Finance Minister Yoo Il-ho offered reassurance to lawmakers Friday about the government's fiscal policies in response to a question about a recent comment by International Monetary Fund(IMF) chief Christine Lagarde.

She singled out South Korea, Germany and Canada as countries that have what she calls "fiscal space," and can afford to take stimulus action to help revive the global economy.

Separately, Bank of Korea Governor Lee Ju-yeol also affirmed the government has carried out expansionary policies, and says he believes it will continue to do so.