JoongAng Daily: South Korea's Wave of Hundreds of Thousands of Business Closures, Domestic Demand Weakness Impacts Retail and Catering
JoongAng Daily, July 7 report, the number of businesses that applied for closure in South Korea exceeded one million for the first time last year, reaching 1,008,282, an increase of 21,795 from the previous year, setting a new high since 1995. The closure rate rose to 9.04%, meaning about one out of every ten registered enterprises closed. Industries closely related to domestic demand were hit first: retail businesses had 299,642 closures, accounting for 29.7%; catering accounted for 15.2%; real estate and wholesale industries accounted for 11.1% and 7.1% respectively. Poor business performance was the main reason, with over 500,000 applicants.
The crisis is still spreading. In the first quarter of this year, the number of coffee drink shops in South Korea decreased by 743 (a decline of 0.8%), and convenience stores decreased by 455 (a decline of 0.8%). Individual business owners' financial pressure also intensified. According to central bank data, the overdue loan rate for vulnerable individual business owners surged to 12.24%, the highest in nearly a decade. Kim Gwang-sik, head of the economic research department at the Korea Institute of Economic Research, pointed out that high interest rates and high prices suppress actual income, thus curbing consumption, and structural measures need to be implemented simultaneously to prevent the wave of closures from expanding. Although the government has added budget twice to "infuse" funds, the operating environment for individual business owners will not significantly improve in the short term.
Original article: https://www.toutiao.com/article/1836958237114715/
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