Seoul exceeds spending plan to trigger growth

[THE INVESTOR] The South Korean government exceeded its fiscal spending plans during the first five months of the year to help stimulate the lackluster economy, the Finance Ministry said June 22. The government had earlier announced that it would spend approximately 60 percent of this year’s 280 trillion won (US$242 billion) budget set aside for the central government in the first half. The ministry said it has used 135.1 trillion won of the budget in the first five months of the year, surpassin

June 22, 2016

BOK chief to attend BIS general assembly

[THE INVESTOR] The head of South Korea‘s central bank will visit Basel, Switzerland this week for the annual general assembly of the Bank for International Settlements, the Bank of Korea said on June 22. BOK Gov. Lee Ju-yeol will depart on June 23 to attend the 86th BIS General Assembly to be held over the weekend.BOK governor Lee Ju-yeolWhile in Basel, the South Korean top central banker will also attend the BIS Global Economy Meeting and the Meeting of the Asian Consultative Council where he w

June 22, 2016

BOK governor says uncertainties will grow in 2H

[THE INVESTOR] Bank of Korea Gov. Lee Ju-yeol said on June 22 that the Korean economy is expected to see increasing external and internal uncertainties in the second half of the year. He pointed out that the UK’s referendum result on Britain’s exit from the European Union could further spur volatility in global financial market, during a meeting with economic experts held at the central bank’s headquarters in Seoul. Bank of Kora Gov. Lee Ju-yeol. The InvestorLee also expressed concerns that the

June 22, 2016

Samsung Electronics to lead Q2 earnings growth: analysts

[THE INVESTOR] Korea Inc. is expected to show steady growth in the second quarter but only if Samsung Electronics is included in the club. Local securities firms have revised up their projections for aggregate operating profit of 172 companies listed on the benchmark KOSPI to 33.83 trillion won (US$29.2 billion) as of June 22, up 1.67 percent from their forecast a month earlier. “The burden of KOSPI’s high valuation has been eased as major companies’ Q2 revenue forecasts have continuously increa

June 22, 2016

SM Entertainment to build culture playground in Changwon

K-pop powerhouse SM Entertainment and Changwon City, South Gyeongsang Province, will collaborate for setting up a colossal culture complex, the city mayor said on June 21.SM Entertainment along with a consortium consisting of top-tier construction companies is planning to build a nine-story complex with parking space designed to accommodate approximately 206 vehicles, near the city’s main bus terminal, Changwon Mayor Ahn Sang-soo said in a press conference.Aerial view of SM Entertainment’s cultu

June 21, 2016

Deposits at brokerages soar amid low rates

[THE INVESTOR] Customer deposits at Korean securities companies have surged to a new high, data showed on June 21, as investors seek high-yielding vehicles amid record-low interest rates. On June 9, the Bank of Korea slashed its key interest rate by a quarter-percentage point to 1.25 percent in an apparent bid to cushion any fallout from the ongoing corporate restructuring drive and bolster the sputtering economy.It was the first rate cut in 12 months.According to data by the Korea Exchange and

June 21, 2016

BOK collects 260 million dormant coins

[THE INVESTOR] The Bank of Korea said on June 21 it has collected more than 260 million dormant coins to turn them back into circulation. The central bank started the recollection campaign in May and people turned in some 267 million coins, worth 36.7 billion won (US$31.64 million), to convert them into banknotes. The result marks a 1.9 percent increase in the number of reclaimed coins from last year’s campaign, and a 1.4 percent rise in their combined value. BOK is making a big push to turn the

June 21, 2016

Korea scraps southeast airport project

[THE INVESTOR] The existing Gimhae Airport near Busan will be expanded instead of building a new airport. The government had reviewed plans to build a new airport in the region, with Miryang and Busan’s Gadeokdo Island thought to be the most likely sites. With the project estimated to cost as much as 10 trillion won (US$ 8.6 billion), the project has been at the center of heated debate and controversy, with critics saying the new airport could fail. By Choi He-suk (cheesuk@heraldcorp.com)

June 21, 2016

NK’s trade dependence on China grows to 91%: report

[THE INVESTOR] North Korea’s dependence on China for international trade has tripled to over 90 percent since 2000, a report showed on June 21. According to a report by Hyundai Research Institute, North Korea’s trade with China is estimated to be US$5.71 billion, accounting for 91.3 percent of Pyongyang’s US$6.25 billion trade in 2015. The figure of US$5.71 billion includes HRI’s estimate of Pyongyang’s crude oil imports from China. Pyongyang, North Korea. Young PioneerThe trade dependence figur

June 21, 2016

Exports set to continue record-long decline

[THE INVESTOR] The downward spiral for Korea’s exports will likely continue for the 18th consecutive month, data showed on June 21. According to Korea Customs Service data, exports between June 1 and June 20 came in at about US$ 25.66 billion, down 12.8 percent compared to the same month last year. The customs office said that the fall in integrated circuit exports has contributed significantly to the figure for June so far. It noted that integrated circuit exports in June fell 9.1 percent compa

June 21, 2016

Location of new southeastern airport to be announced Today

[THE INVESTOR] The location of a new airport in the country’s southeast will be announced at 3 p.m. on June 21, the Ministry of Land, Infrastructure and Transport said.The location of the new airport has been narrowed down to Miryang and Busan’s Gadeokdo Island, with the former considered to be the more likely choice. A bird's eye view of Gadekdo new airport.With the project estimated to require as much as 10 trillion won (US$ 8.6 billion), the project has been at the center of heated debate and

June 21, 2016

Pompidou Seoul branch: Culture meets economy

[THE INVESTOR] The French cultural platform Pompidou Centre is set to open a Seoul branch in March 2017 in a move that could help revitalize the Korean economy that is increasingly becoming more diverse. However, there are also doubts and concerns surrounding the plan due to the rumored royalty payment, which is expected to reach 1.5 million euros (2 billion won). The amount would be paid annually to the Paris Pompidou Centre. The Korean art industry is questioning whether the branch’s contribut

June 21, 2016

Minimum wage needs balanced, flexible approach

[THE INVESTOR] Labor and management representatives continued to run parallel last week at the fourth and latest round of negotiations on setting the minimum wage across the country next year.Labor groups insist that the 2017 minimum wage should be pegged at 10,000 won ($8.59) per hour, up 65.8 percent from 6,030 won this year, while business circles call for a freeze.According to data from the Minimum Wage Commission, Korea’s minimum wage rose by an annual average of 8.7 percent over the 15 yea

June 20, 2016

Depositors’ frustration

[THE INVESTOR] Bank of Korea’s cut in the benchmark rate has lowered commercial banks’ interest rate offering on deposits to a record-low level.Commercial banks say they -- as well as depositors -- are also suffering low profitability as a result of the BOK’s all-time low base rate of 1.25 percent. Over the past two years, the central bank has lowered the rate by 125 basis points from 2.5 percent in July 2014. A savings product offered by a commercial bank provides customers with only a 0.01 per

June 20, 2016

Antigraft act will cause US$10b loss per year: think tank

[THE INVESTOR] The new anticorruption act set to take effect in September will cost local businesses 11.6 trillion won (US$9.96 billion) on an annual basis, a think tank claimed.Commonly known as the Kim Young-ran act, it will place a ceiling on the value of gifts -- cash and goods -- and meals individuals in selected professions can have in their professional capacities. The government announced its enforcement in May. According to a report compiled by the Korea Economic Research Institute, if

June 20, 2016

Tax-to-GDP ratio rises on increased taxpayers

[THE INVESTOR] The nation’s ratio of income tax revenue to gross domestic product has been rising at a fast pace in recent years largely due to the increasing number of taxpayers, data showed on June 20. The country’s revenue from earned income and global income tax came to 36.8 trillion won (US$31.4 billion) in 2014, accounting for 2.48 percent of the overall tax revenue of 1,485.1 trillion won, according to the report based on data from the Finance Ministry and the National Tax Service.Earned

June 20, 2016