Shanghai municipal government will launch a 160-billion-yuan ($23.4 billion) economic stimulus package, adding to the 500-billion-yuan plan introduced last Friday to boost the slowing economy, officials have said.

Last week, the city's urban construction and communications bureau announced plans to spend 500 billion yuan on a wide range of infrastructure projects, such as the improvement of affordable and low-rent housing, building projects in the suburbs, constructing an international shipping center and investment in urban transportation facilities.

Also, the mayor announced a series of measures to expand financing for small and innovative companies.

"The measures, along with the billions of yuan being committed, are in response to the central government's latest moves to stimulate domestic demand," Sun Lijian, a professor of Fudan University, said.

The 500-billion-yuan investment will accelerate reconstruction projects, which have seen costs spiking in the past few years, Chen Xian, a professor from Shanghai Jiao Tong University, said.

Other long-awaited investment projects that have yet to launch due to shortages in capital funding may also be activated through the investment package, he said.

Still, he said the criteria for the selection of projects will determine the real effects of the stimulus plan, he said.

"Given the current situation, the investments should be put into areas of development that need the money. Projects aiming to expand capacity should not be considered," Chen said.

The city's growth rate fell 2.7 percentage points to 10.3 percent in the first half from the previous year.

The next two months and the first half of 2009 will be "tough", and the primary economic task for the government will be to take every effective measure to sustain the city's smooth economic growth and improve the livelihood of residents, the mayor said.