A large portion of the money will be spent on creating more jobs for young people. A lack of jobs has been cited as one reason why many South Koreans are not getting married, which is hurting birth rates.

Childbirth in South Korea dropped to a record low last year by reaching 406,300, down 7.3 percent or 32,100 births from a year earlier, according to a report by Statistics Korea. The figure marked the lowest number of newborns since 1970 when the statistics agency started compiling such data.

Also, the number of people getting married fell to the lowest level in more than 40 years in 2016 by reaching 281,600, down 7 percent from a year earlier, the agency said. In 1974, the number of couples tying the knot reached 259,100.

The ministry added that part of the budget will be spent on providing subsidies for infertility treatments for couples in low income brackets.

The ministry forecasts about 407,000 infants to be born this year, with the country's fertility rate, or the average number of babies that a woman is projected to have during her lifetime, dropping to 1.2.

To tackle the issue of "aged society," defined as when more than 14 percent of the population are 65 or older, the government will spend money on creating more jobs for seniors. 

Government officials and private sector experts have warned that the aging population, coupled with the low birthrate, could pose a serious threat to the nation's economy as it could lead to fewer workers and increased spending on health and welfare in the long run. (Yonhap)