[News Focus] Household debt risks mount as banks halt interest discounts

SEJONG -- South Korea’s benchmark interest rate has been set at an all-time low of 0.5 percent per annum for 10 months since May last year, as the central bank tries to prop up a lackluster economy that has faltered in the wake of the novel coronavirus. The record-low rate could benefit many households and micro-business owners who resort to financial loans in this unexpected situation. But the Bank of Korea will have no choice but to conduct rate hikes eventually on a mid-term basis, g

March 25, 2021

Construction contracts surge 18.7% in Q4

SEJONG -- The value of construction contracts in South Korea jumped nearly 19 percent in the fourth quarter of 2020 thanks to increased private and public projects, government data showed Thursday. The value of civilian and public works contracts stood at 82.4 trillion won ($72.7 billion) in the October-December period, up 18.7 percent from the same period a year ago, according to the data from the Ministry of Land, Infrastructure and Transport. Public sector contracts swelled 24.9 percent on-

March 25, 2021

BOK to extend financial support for pandemic-hit small merchants, SMEs

South Korea's central bank said Thursday it will extend financial support for smaller merchants and firms by six months to help them ease a funding squeeze amid the COVID-19 pandemic. The financial support of low-rate loans worth 16 trillion won ($14.1 billion) had been scheduled to end this month, but the Bank of Korea (BOK) said the scheme will be put in place by September. Under the scheme, the BOK provides funds to local banks at an interest rate of 0.25 percent to encourage them to exte

March 25, 2021

BOK chief pens rosier forecasts for economy, downplays inflation

South Korea’s central bank chief said Wednesday that the nation’s economy could be expected to see a faster recovery from COVID-19 woes than anticipated in the bank’s previous forecast of 3 percent, while downplaying inflation risks that could stem from the rebound. In a nod toward the vaccination campaigns of major economies, which are picking up speed, Bank of Korea Gov. Lee Ju-yeol projected that Korea would see a faster-than-expected recovery of its exports and facility in

March 24, 2021

Tax agency launches probes into offshore tax evasion

South Korea’s tax agency said Wednesday that it has launched probes into 54 offshore tax evaders who enjoyed social benefits from the country without paying taxes here. The National Tax Service discovered 14 individuals with dual nationality who enjoyed health and welfare benefits but concealed their properties and earnings overseas to elude taxation, the agency said. Six foreign-affiliated firms were also caught for changing the form of their businesses to limited liability companies to

March 24, 2021

Insurers' profit up 13.9% in 2020 amid pandemic

The combined net profit of insurance firms in South Korea rose 13.9 percent on-year in 2020, due partly to fewer car accidents as people stayed home amid the coronavirus pandemic, data showed Wednesday. Life and non-life insurers saw their combined net profit increase by 742 billion won ($654 million) to 6.08 trillion won last year, according to data from the Financial Supervisory Service (FSS). The FSS said profits of non-life insurers went up because of fewer claims as losses in car insuranc

March 24, 2021

Population mobility falls at sharpest clip in 6 years in Feb.

The number of South Koreans who moved to different residences in the country declined at the sharpest pace in six years in February amid a housing supply shortage, data showed Wednesday. The number of people who changed their residences fell 9.6 percent on-year to 706,000 in February, according to the data compiled by Statistics Korea. It marked the biggest on-year decline for any February since a 12.5 percent fall in 2015. It also marked the second straight month of decline after population

March 24, 2021

Instant noodle makers see 2020 sales jump amid pandemic

Sales of South Korea's top instant noodle makers posted strong sales in 2020 thanks to brisk demand amid the coronavirus pandemic, data showed Wednesday. Nongshim Co. said its sales of instant noodles, or "ramyeon" in Korean, came to 2.09 trillion won ($1.85 billion) last year, up 16.3 percent from the previous year, according to the data from the Financial Supervisory Service. It marks the first time for Nongshim's ramyeon sales to top the 2 trillion-won mark and the amount accounte

March 24, 2021

BOK chief sees faster-than-expected economic recovery in 2021

South Korea's economy is expected to recover from the COVID-19 pandemic at a faster pace than expected this year as the US economic recovery gathers steam, the head of the Bank of Korea (BOK) said Wednesday. BOK Gov. Lee Ju-yeol, however, said the central bank has no plan to normalize its monetary policy earlier than anticipated, even though the nation's economy is predicted to grow at a faster pace in 2021. His remarks came as US President Joe Biden's $1.9 trillion aid package is expected to

March 24, 2021

Producer prices up for 4th month in February

South Korea's producer prices rose 0.8 percent on-month in February on a modest rise in oil prices, extending their monthly gains for the fourth straight month, central bank data showed Wednesday. The producer price index, a barometer of future consumer inflation, stood at 105.85 in February, compared with 105.05 a month earlier, according to the Bank of Korea (BOK). The index gained 2 percent from the previous year, the BOK data showed. The prices of agricultural goods gained 5.1 percent on-

March 24, 2021

S. Korea to ‘flexibly’ intervene in bond market if necessary: vice minister

Nodding toward the latest global market jitters caused by a sudden spike in US bond yields, South Korea’s vice finance minister vowed Tuesday to “flexibly intervene” if market volatility increases. “Recently a dampened investor sentiment and increased volatility have been observed in the Treasury bond market,” Vice Finance Minister Kim Yong-beom said in a macroeconomics meeting. “We will make our best effort to stabilize the market, including making an adju

March 23, 2021

Boardrooms at banking groups under pressure for change

Boardrooms of South Korea’s financial groups are facing criticism for defying pressures for change despite their failure in holding top executives responsible for exposing their operations to legal and financial risks. Creating headwinds for Shinhan Financial Group and Woori Financial Group, which will vote on reappointments of inside and outside directors during shareholders meetings scheduled this week, are accusations that the current board members have been negligent in their oversig

March 23, 2021

S. Korea's trade deficit in intellectual property rights widens in 2020

South Korea's deficit in the trade of intellectual property rights widened in 2020 from a year earlier as patent payments by firms increased, central bank data showed Tuesday. The nation's deficit in the intellectual property account came to $1.87 billion last year, compared with a shortfall of $530 million in 2019, according to preliminary data from the Bank of Korea (BOK). Its exports of products and services subject to intellectual property right payments reached $15.53 billion in 2020, sl

March 23, 2021

S. Korea to build 2 hydrogen repository facilities

South Korea said Tuesday it plans to build two facilities that collect by-product hydrogen and transport the resource in an effort to further boost the country's green energy drive. The country will spend 6.3 billion won ($5.59 million) on the project, according to the Ministry of Trade, Industry and Energy. While sites for the construction have not yet been selected, the ministry plans to find suitable locations by May.   A shipping center reserves by-product hydrogen produced fr

March 23, 2021

S. Korea's biz confidence gains for 9th month in Feb.: OECD

South Korea's business confidence climbed for the ninth consecutive month in February amid growing hopes of an economic recovery, a poll by the Organization for Economic Cooperation and Development (OECD) showed Tuesday. The OECD business confidence index (CSI) came to 99.5 for Asia's fourth-largest economy last month, up 0.3 point from the prior month, according to the survey by the group of 37 mostly rich and advanced nations. The OECD index for South Korea has been on the rise since June wh

March 23, 2021

Majority of Koreans pessimistic about job market this year: survey

More than half of South Koreans believe that the nation’s labor market will further deteriorate this year, compared with the conditions before the COVID-19 pandemic, a survey conducted by a think tank here showed Monday. Some 77 percent of Koreans said in the survey commissioned by the Korea Economic Research Institute that the nation’s job market is likely to worsen compared with conditions in 2019. Of the 77 percent, 44.6 percent believe that the market will “extremely deter

March 22, 2021

Household income surplus surges as people cut spending

South Korea’s household income surplus increased sharply last year as people tightened their belts to weather the protracted economic slowdown triggered by the COVID-19 pandemic, data showed Monday. The nation’s household income surplus rate posted 32.9 percent, 32.3 percent, 30.9 percent and 30.4 percent, respectively, in the first through fourth quarters of 2020, according to a report from Statistics Korea. The figure has surpassed 30 percent only five times since 2003, when the

March 22, 2021

Imported commercial car sales fall 24% in February

Sales of imported commercial vehicles in South Korea fell 24 percent in February from a year earlier on lower demand amid the extended coronavirus pandemic, an industry association said Monday. The number of newly registered imported commercial vehicles fell to 261 units last month from 344 a year earlier, the Korea Automobile Importers and Distributors Association (KAIDA) said in a statement. Sales of all imported commercial vehicles declined last month as COVID-19 containment measures and u

March 22, 2021

S. Korea to raise W400b for tech innovation fund

South Korea said Monday it plans to raise 400 billion won ($354 million) through 2024 to support businesses seeking to innovate their products and services by utilizing high-end technologies. The first batch of the digital technology innovation fund, amounting to 102 billion won, will be rolled out throughout this year, according to the Ministry of Trade, Industry and Energy. The amount surpassed the original target of 80 billion won. The fund, raised jointly by the public and private financ

March 22, 2021

S. Korea's pet fish market to grow 35% by 2025

South Korea said Monday it will seek to expand the size of the local pet fish market by 35 percent through 2025 by developing more homegrown species while encouraging the public to adopt them. Under the goal, the size of the local pet fish market will reach 657 billion won ($581 million) in 2025, up 35 percent from 487.3 billion won tallied in 2020, according to the Ministry of Oceans and Fisheries. Over the period, the number of farms raising pet fish will increase to 186 from the current 151

March 22, 2021