[THE INVESTOR] The investment rate of South Korean companies continues to be sluggish following the 2008 global financial crisis despite a recent recovery in new commitments by large businesses, a report said on Sept. 20.

In the 2009-2015 period, corporate investment grew at an annual average of 1.2 percent, compared with an average of 5.7 percent over an eight-year period prior to the 2008 financial crisis, according to the report from the Korea Economic Research Institute.

The slow growth following the global financial crisis was attributed to a sharp drop in fresh investment by small and medium-sized firms.

In the 2001-2008 period, investment by small and medium-sized companies here rose at an average of 10.5 percent. In the seven-year period following the 2008 crisis, the amount dropped 1 percent.

Large firms also cut back on fresh investment, but their investment continued to grow at an average of 2.5 percent since 2009, compared with a 4.2 percent increase over the 2001-2008 period.

“In addition, investment by large companies have posted a positive gain since 2014, while that of smaller firms continue to remain on the wane,” the report said.

“There need to be policy measures to help reduce the investment cost of local firms, such as a cut in corporate tax, in order to promote corporate investment that is showing signs of rapid contraction,” it added.

(theinvestor@heraldcorp.com)