Korean households' excess cash holdings shrink in Q2

Excess cash held by South Korean households and non-profit organizations fell in the second quarter from three months earlier as domestic spending picked up with more people purchasing homes amid a great surge in home rental fees, central bank data showed Wednesday.Excess funds held by households and non-profit agencies here came to 24.9 trillion won ($21.01 billion) at the end of June, down from 29.6 trillion won at end-March, according to the data from the Bank of Korea.Excess funds refer to m

Sept. 23, 2015

Smaller firms' debt repayment ability worsens despite record low rates

Smaller manufacturers' ability to pay interest on their debts worsened despite record low interest rates, partly as their profitability deteriorated, central bank data showed Wednesday.  According to the data from the Bank of Korea, the interest coverage ratio of smaller firms came to 406.77 percent at the end of June, down 57.45 percentage points from three months earlier.  The interest coverage ratio, often called times interest earned, is calculated by dividing a company's earnings by the amo

Sept. 23, 2015

S. Korea seen to miss mid-term per capita income goal

South Korea is unlikely to attain its per capita income goal of $30,000 by early 2018 in the face of slower than expected economic growth, local think tanks said Wednesday.  The pessimistic predictions come as Asia's fourth-largest economy is confronted with a slew of external negatives, including a slowdown in China's growth, a drop in exports and global financial market uncertainties.  The finance ministry maintains that a 3.1 percent expansion in real gross domestic product is possible this y

Sept. 23, 2015

Key sectors' profitability worsens over last 6 years: data

South Korea's major industries have suffered a severe pullback in their profitability over the past few years largely due to increased foreign rivalries and a protracted economic slump, data showed Wednesday.  According to the data compiled by the Korea Chamber of Commerce and Industry, the shipbuilding, construction and chemicals sectors have taken a beating, while oil-refining, semiconductors and other sectors have become more profitable.  The data showed that the country's shipbuilding sector

Sept. 23, 2015

ADB cuts S. Korea's 2015 growth forecast to 2.7 pct

The Asian Development Bank has slashed its forecast for South Korea's 2015 economic growth to 2.7 percent from 3.5 percent, citing an economic slowdown in China.   The revised forecast, published on Tuesday, is lower than a 2.8 percent forecast set in July by South Korea's central bank. The ADB also cut its forecast for China's economic growth this year to 6.8 percent from 7.2 percent.   South Korea's economy is reeling from sluggish exports, pressured by a slowing economy in China, and weaker d

Sept. 22, 2015

S. Korea, EU agree to ease financial volatility

South Korea and the European Union have concurred on the need to work together to ease financial volatility that could impede the global economic recovery, the government said Tuesday.  The finance ministry said the understanding was reached at the fifth Korea-EU Economic Dialogue session in Sejong City on Monday, where the two sides touched on macroeconomic developments, structural reforms, issues related to the Group of Twenty and investment promotion.  "South Korea stressed the importance of

Sept. 22, 2015

Seoul shares open a tad higher on Wall Street gains

South Korean stocks started a shade higher on Tuesday as investor sentiment got a boost from overnight Wall Street gains.   The benchmark Korea Composite Stock Price Index moved up 2.23 points, or 0.11 percent, to stand at 1,966.91 in the first 15 minutes of trading.   The Dow Jones industrial average edged up 0.8 percent on Monday, with the tech-rich Nasdaq Composite gaining 0.1 percent.   Autos led the gains as industry leader Hyundai Motor surged 1.26 percent and its sister affiliate, Kia Mot

Sept. 22, 2015

Banks pump out gloomy forecasts for economy

Recent forecasts on Korea’s economic outlook by private research institutes at home and abroad have been overly pessimistic. Most argue that the export-driven nation could face a low-growth era from external uncertainties.But some local analysts and government officials downplay the skepticism, saying the economy has already hit the bottom in the first half of the year, and things will only get better.According to the Korea Center for International Finance, more and more foreign investment banks

Sept. 21, 2015

Chinese slowdown may spark further devaluation: vice minister

China will likely carry out another devaluation of its currency to prop up the world's second-largest economy as it is tipped to face a slowdown in the long term, a senior Seoul official said Monday.  "Many economists predict an economic slowdown in China in the medium and long term because of an unstable stock market and a possible structural change in its economy," Vice Finance Minister Joo Hyung-hwan said in an opening address at a seminar in Seoul. "In that case, the Chinese authorities may

Sept. 21, 2015

S. Korea's farm exports plunge 9.3 pct on-year in Aug.

South Korea's exports of agricultural and forestry products dropped significantly from a year earlier last month as shipments to all major markets except China continued to dwindle, the government said Monday.  Outbound shipments of food and other farmed products reached $457.6 million in August, down 9.3 percent from the same month last year, according to the Ministry of Agriculture, Food and Rural Affairs.  The cut was partly attributed to a large drop in shipments to Japan, previously the wor

Sept. 21, 2015

Foreign sell-off of Korean ETFs hits record high in Aug.

Foreign investors sold the largest amount of an exchange-traded fund with exposure to major South Korean firms in August, industry data showed Monday, amid ongoing uncertainties in the global economy.   Investors yanked a net $310 million from the iShares MSCI Korea Capped ETF last month, a fund that has exposure to large and mid-sized South Korean firms, according to the data.   The outflow marks the largest amount since the fund was first launched in May 2000, the data showed.  An ETF refers t

Sept. 21, 2015

'Jeonse' not affordable anymore, prodding Koreans to buy homes

Oh Jong-suk, a 41-year-old office worker in Seoul, could not fall into a deep sleep after receiving a call from the landlord of the home he has leased.  As his two-year housing contract draws toward its expiration, the property owner demanded a 20-percent increase in the rental deposit, dubbed jeonse here, if Oh's family wants to stay longer.  The bread earner with two kids in elementary school has been on the lookout for other jeonse housing, but opted to ditch his plan to move as jeonse prices

Sept. 21, 2015

Tax benefits estimated to inch down in 2016

The amount of tax incentives to individuals and companies will edge down nearly 1 percent in 2016 from this year as the government scales back support for large businesses, a government report showed Monday.  According to the report submitted to the National Assembly, tax deductions, tax credits and other tax breaks are estimated at 35.3 trillion won ($30.1 billion) next year, down 333.1 billion won, or 0.9 percent, from this year.  Tax breaks for individuals will likely reach 25.1 trillion won

Sept. 21, 2015

S. Korean banks' home rental loans surge 9-fold in 5 yrs

Loans extended by local banks to individuals for home rentals have spiked over the past five years, market data showed Monday, amid a surge in rental prices driven by record-low interest rates and a shortage of homes for rent.  According to the data, loans extended by the six largest local lenders specifically for home rentals amounted to about 18.49 trillion won ($15.79 billion) as of the end of August, spiking from around 2.03 trillion won at the end of 2010.  The rise is apparently tied to a

Sept. 21, 2015

Seoul shares open weaker amid China uncertainties

South Korean stocks started lower on Monday, dragged down by losses in tech shares, after the U.S. Federal Reserve's reference to growth concerns in China last week, analysts said.   The benchmark Korea Composite Stock Price Index shed 17.24 points, or 0.86 percent, to 1,978.71 in the first 15 minutes of trading.   Last week, the Federal Open Market Committee kept its interest rate flat. But Fed chief Janet Yellen noted that the committee will keep tabs on the ongoing worries facing emerging mar

Sept. 21, 2015

S. Korea launches 1st round of FTA talks with Central American countries

South Korea and six Central American countries, including El Salvador and Panama, launched their first round of negotiations for a free trade agreement Monday.  The start of negotiations for the seven-way FTA is the result of the countries' trade ministers agreeing to sign a high-level, comprehensive FTA three months ago.  The six Central American countries include Guatemala, Honduras, Nicaragua and Costa Rica. Together, the six countries make up the fifth-largest market in Central and South Ame

Sept. 21, 2015

Labor, structural reforms critical to overcoming economic woes: finance minister

The current push to implement labor market and broader structural reforms is critical to South Korea overcoming its current economic woes, the country's top policymaker said Sunday.Speaking to reporters at a policy seminar on Geoje Island 470 kilometers southeast of Seoul, Finance Minister Choi Kyung-hwan pointed out that South Korea had always faced obstacles as it grew economically and now was no different. He cited problems facing China and lingering uncertainties about the U.S.' stance on in

Sept. 20, 2015

Social economic mobility, creativity key to overcoming S. Korean woes: KDI report

South Korea must strive for greater social economic mobility and creativity if it wants to overcome the myriad of challenges in its path, a report by a state-run think tank said Sunday.The report titled "Mobility and Creativity - the Keywords to Structural Reforms" claimed that rising frustrations among the youth, who are hard pressed to find good jobs, and drops in corporate earnings all stem from structural problems in Asia's forth largest economy.The Korea Development Institute paper stressed

Sept. 20, 2015