Small and medium enterprises in South Korea are planning to scale back their investments in facilities amid a bleak economic outlook, with their plans nearing the level seen in 2009 in the aftermath of the global financial crisis, a report showed Tuesday.
In a survey of 3,070 SMEs by policy lender Industrial Bank of Korea, 32.3 percent of the companies said they have plans for facility investment this year, down 8.7 percentage points from a year earlier.
The figure marks the lowest level since 34.3 percent in 2009, when the global economy was suffering from a worldwide financial crises triggered by the collapse of Lehman Brothers.
A total of 74.3 percent of firms planning to cut investments cited already-sufficient facilities, while 46.1 percent picked uncertain domestic demand.
Meanwhile, 54.4 percent of the firms called on the government to boost domestic demand, while 38.6 percent stressed the need for policy funding under favorable circumstances. A total of 27.9 percent asked the government to retain the current low-yield trend.
South Korea’s benchmark interest rate has stayed steady at 3.25 percent for the eighth straight month as of February. The Bank of Korea’s monetary policy committee is set to hold its monthly rate-setting meeting on Thursday.
