The South Korean government will extend the current 30-percent consumption tax cut on auto purchases set to end in late June for another six months until the year's end.

Finance Minister Hong Nam-ki said on Friday that the move is aimed at stimulating domestic demand by expanding the sale of vehicles.

In a bid to create more jobs, the government will also pay an incentive of 750-thousand won per month for up to a year starting in July to small and medium-sized businesses that hire young people as regular workers.

Referring to the recent rise in exports and improvement in both business and consumer sentiment, Hong assessed that the recovery momentum is distinctive.

The minister pledged to announce the government's economic policy direction for the second half of the year in mid- to late June, in order to support recoveries in domestic demand, investment and exports.