Domestic facility investment has continued to decline in recent months, while overseas investment by the nation’s manufacturers is on a steep rise.Facility investment in South Korea contracted 1.4 percent on-month in August, marking the sixth consecutive month of downward movement, according to data released last week by Statistics Korea. It was the longest streak of decline in facility investment in Asia’s fourth-largest economy in nearly two decades. The figure fell for 10 months i

Economy Oct. 8, 2018

Despite a recent rebound in consumer sentiment, the country’s household consumption is set to weaken in the longer term amid deteriorating employment conditions and rising debt-service costs, experts say.Bank of Korea data showed last week consumer confidence rebounded in September after falling for eight straight months, partly on the back of robust exports and low inflationary pressure. The composite consumer sentiment index, which is based on the central bank’s survey of about 1,9

Economy Oct. 3, 2018

Concerns are rising over the weakening of the country’s manufacturing industries, which are suffering the effects of deteriorating conditions at home and abroad.Data released last week by Statistics Korea showed that the manufacturing capacity index -- which measures the maximum possible level of production through the full use of manpower, facilities and other input factors -- had declined for five consecutive months as of July, from 102.9 to 102.6. The annual average figure for 2015 is s

Economy Oct. 1, 2018

The country’s large companies have been piling up growing amounts of cashable assets as they remain reluctant to expand investments in the face of what they perceive as anti-business policies at home and increasing uncertainty in the global economic environment.According to data from the Financial Supervisory Service, Korea’s top 30 companies in terms of turnover had 88.48 trillion won ($79.24 billion) in cashable assets in the first half of this year, up 11.5 percent from a year ear

Economy Sept. 26, 2018

A protracted slump in South Korea’s exports might set in next year and jolt the country’s economy, which has relied on outbound shipments for growth amid sluggish domestic demand, economists say.Reports released last week by the Ministry of Economy and Finance and the state-run Korea Development Institute cited robust exports as a key factor in keeping the economy on the path to recovery and preventing it from taking a sharp downturn.In the first eight months of this year, Korea&rsqu

Economy Sept. 19, 2018

A widening gap between South Korea’s large, export-oriented companies and its domestically focused smaller enterprises, in terms of both earnings and employment, highlights the need for a pro-corporate policy across the board, economists say.Small and midsized enterprises have been hit harder by the increased costs stemming from a set of labor-friendly measures taken by President Moon Jae-in’s administration in its pursuit of “income-led growth.”Under these circumstances,

Economy Sept. 12, 2018

A steep decline in domestic investments is becoming a main drawback on the country’s economic growth, with projections suggesting it is likely to fall short of the government’s target of 2.9 percent this year.Investments in facility, construction and intellectual property production dropped on-quarter in the April-June period, according to data released by the Bank of Korea last week. It marked the first time investments had fallen simultaneously in the three segments since the secon

Economy Sept. 10, 2018

A steep rise in debt owed by self-employed people with faltering businesses is a ticking time bomb for the South Korean economy, experts warn.Outstanding loans to the self-employed increased 77 trillion won ($68.9 billion) on-year to 598 trillion won at the end of last year, according to data from the Financial Supervisory Service.The figure is now estimated to be close to 615 trillion won, given that banks extended 15.8 trillion won more in loans in the first seven months of this year, with fig

Economy Sept. 5, 2018

Concerns are growing over the weakening vitality of the Korean economy as facility investment continues to decrease, with consumer sentiment and business confidence sluggish.Government data released last week showed facility investment fell 0.6 percent on-month in July, marking a decline for five consecutive months. It was the longest straight decline since the foreign exchange crisis, when investment fell for 10 straight months from September 1997. Analysts at the state statistics office a

Economy Sept. 3, 2018

The increase in tax revenue that South Korea is expected to see in the coming years should not give it a false sense of security in light of the fiscal cliff that might be ahead, experts say.The government now envisions that an additional 60 trillion won ($53.6 billion) in taxes will be collected over the next five years, compared with amounts projected in a midterm fiscal management plan drawn up last year. Finance Minister Kim Dong-yeon recently said the excess revenue would amount to 19 trill

Economy Aug. 22, 2018

The government’s assessment that the Korean economy is still on the path to recovery is being dented by figures showing employment and corporate profitability are continuing to worsen sharply.A monthly report recently released by the Ministry of Economy and Finance adhered to the positive assessment of economic activities for nine consecutive months in August. Ministry officials have rebuffed suggestions by many economists that the country’s economy took a downward turn entering the

Economy Aug. 20, 2018

An increase in government spending, which has been precipitated under President Moon Jae-in’s administration, contrasts with sluggish private consumption in the country.Economists note that expanded public expenditure coupled with dampened private consumption will do little to reinvigorate the Korean economy that is losing growth momentum.Recent data from the Bank of Korea showed government outlays accounted for 23.63 percent of the country’s domestic final consumption expenditure in

Economy Aug. 15, 2018

Regulatory reforms need to be accelerated to ensure that massive investment plans unveiled or drawn up by the country’s major conglomerates will be implemented smoothly in the coming years, economists say.In the past months, six local business groups have announced plans to make new investments worth more than 330 trillion won ($290 billion) and hire 188,000 workers, with investment periods spanning one to five years.Samsung, Korea’s largest conglomerate, last week unveiled an invest

Economy Aug. 13, 2018

The Korean economy is being decoupled from a robust recovery of the global economy this year, held back by sluggish domestic demand and deteriorating external conditions.Last month, the Ministry of Economy and Finance and the Bank of Korea revised down their 2018 growth forecasts for Asia’s fourth-largest economy to 2.9 percent from an earlier prediction of 3 percent. The Korean economy expanded 3.1 percent last year.Private economists, however, remain skeptical about the possibility of th

Economy Aug. 8, 2018

Weakening construction investment is cited by economists as a key reason for the country’s deteriorating unemployment and decelerating growth.According to a recent report from the Construction and Economy Research Institute of Korea, the on-year increase in domestic construction investment, which averaged 7.6 percent in 2017, dropped to 1.8 percent in the first quarter of this year and minus 0.7 percent in the following three months.The number of jobs created by construction investment shr

Economy Aug. 6, 2018