South Korea

Nearly 12% of South Korean firms became insolvent last year due to the downturn in construction and real estate, marking the highest level since 2019. These companies, burdened with more debt than assets, face complete capital erosion and financial instability, the Chosun Daily reported. According to the Federation of Korean Industries (FKI) on March 23, about 4,466 companies, or 11.9% of all 37,510 externally audited companies (excluding financial firms), are expected to be completely insolvent.

South Korean authorities are ramping up efforts to regulate the crypto market, focusing on exchanges believed to be operating without proper licensing, CoinMarketCap.com reported. The Financial Intelligence Unit (FIU) of the Financial Services Commission is investigating several platforms, including KuCoin, BitMEX, CoinW, Bitunix, and KCEX, for allegedly providing services to South Korean users without registering as Virtual Asset Service Providers (VASPs).

The Bank of Korea (BOK) is set to initiate a pilot program for its central bank digital currency (CBDC), named "Hangang," involving 100,000 participants, CoinMarketCap.com reported. Scheduled to run from April to June this year, the pilot will allow citizens to convert their bank deposits into tokenized deposits for use in local transactions, according to reports from local media.

The protectionist policies of U.S. President Donald Trump are likely to deteriorate the soundness of the financial industry and expand market volatility, ChosunBiz.com reported. According to a report from the Korea Financial Research Institute on the 16th, titled "Implications of Strengthened Protectionism for the Domestic Banking Industry," a slowdown in exports due to global protectionism could lead to deteriorating performances of corporations and industries, causing the insolvency of vulnerable corporations and undermining the soundness of the financial industry.

South Korean supermarket chain Homeplus has pledged to fully repay its vendors, prioritizing small businesses, while apologizing for heightened concerns over its financial stability following a court's approval of its entry into a corporate rehabilitation program earlier this month, the Korea Herald reported.

South Korea’s headline inflation eased in February, providing room for the central bank to loosen monetary policy further to support the slowing economy, the Wall Street Journal reported. The benchmark consumer-price index rose 2.0% from a year earlier, following a 2.2% increase in January, the country’s statistics office said Thursday. The slowdown in price growth was largely driven by stabilizing prices of some agricultural products as well as lower services prices, according to the statistics office.

South Korea’s central bank cut its base rate and lowered its growth forecast for this year, as it resumed easing to support a sagging economy, the Wall Street Journal reported. Growth in Asia’s fourth-largest economy remains weak, with exports weighed by President Trump’s tariff policy and a rise in global trade protectionism. The economy is also hindered by sluggish domestic demand and weak consumer spending amid political turmoil over President Yoon Suk Yeol’s impeachment trial.

South Korea’s economy expanded at a weaker-than-expected pace of 2.0% in 2024 after lackluster growth in the fourth quarter amid weak consumer and business spending, bolstering the case for the central bank’s another rate cut next month, the Wall Street Journal reported. Political turmoil over impeached President Yoon Suk Yeol, who failed a martial-law attempt in December, and sluggish domestic demand weighed on Asia’s fourth-largest economy.

When Jeju Air’s status as South Korea’s biggest low-cost carrier seemed under threat from the merger of the country’s two biggest airlines last year, the company’s chief executive assured employees that it would “actively respond,” possibly by acquiring smaller rivals. Now, a week after a crash that killed 179 people on Dec. 29, Jeju Air’s future is clouded by even deeper questions, the New York Times reported.