South Korea’s central bank held its policy rate steady for a third straight meeting, reflecting caution over financial-stability risks and uncertainty over tariffs, the Wall Street Journal reported. The Bank of Korea on Thursday left its benchmark seven-day repurchase rate unchanged at 2.50%, as widely expected, preserving policy space while signaling that it is ready to act if needed. The BOK’s extended pause comes against a backdrop of continued household-debt growth in South Korea.
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Nearly four out of 10 South Korean construction companies were found to be potential insolvent firms last year, unable to cover their interest expenses with operating profits, the Chosun Daily reported. As the construction industry downturn has prolonged, a significant number of construction companies have found themselves in a state of insolvency where even paying interest with operating profits has become difficult, making normal business operations challenging.
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Bankruptcy Rates of Small and Medium-Sized Construction Companies in South Korea Continue to Edge Up
Amid the continued bankruptcies of small and medium-sized construction companies due to the severe downturn in the South Korean construction industry, the insolvency rate of small and medium-sized construction companies that borrowed through the government's credit guarantee fund is also rising, Maeil Business reported.
South Korea’s headline inflation rebounded in September, lifted by higher services and food costs, but remained close to the central bank’s 2% target, the Wall Street Journal reported. The slightly stronger-than-expected but still subdued inflation is unlikely to prompt any material change in the central bank’s easing policy stance. The benchmark consumer-price index rose 2.1% from a year earlier, accelerating from August’s 1.7% increase, the statistics office said Thursday. On a month-over-month basis, CPI rose 0.5% in September, versus the poll’s forecast of a 0.4% rise.
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Donald Trump faces fresh hurdles in his push to secure major investment pledges from Asian allies, after South Korea said Washington’s terms were unrealistic and a contender to lead Japan’s ruling party hinted at the possibility of reviewing the agreement, Bloomberg News reported. “We are not able to pay $350 billion in cash,” South Korea’s National Security Adviser Wi Sung-lac said in a Channel A News television interview on Saturday evening, referring to Seoul’s investment pledge with Washington.
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If the government's proposed "fatal accident penalty fee" to eradicate industrial accidents becomes a reality, 97 out of 100 domestic construction companies would lose all their annual operating profits or record massive deficits from just one penalty, according to a commentary in The Chosun Daily. This means that even one or two penalties could push most construction companies to the brink of bankruptcy.
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South Korea's Presidential Office said on Tuesday that tariff talks with the U.S. have been stalled for a while, but President Lee Jae Myung is determined not to force Korean companies to sustain losses by rushing to sign a trade deal, Reuters reported. The countries have been struggling to overcome obstacles to finalize a trade deal agreed in July. Details of the broad trade agreement still need to be hammered out, especially around a $350 billion investment fund. "We cannot do everything the U.S. wants. ...
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The Supreme Court of Korea ruled that a former husband’s act of providing his only real estate property as collateral to a creditor without paying his ex-wife’s property division settlement cannot be canceled if the creditor was unaware of his financial situation, the Chosunlibo reported. The Supreme Court’s Second Division (Presiding Justice Kwon Young-jun) overturned a lower court’s ruling in favor of the plaintiff, Lee, in her fraudulent conveyance cancellation lawsuit against A, and remanded the case to Uijeongbu District Court on the 14th.
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South Korea's top security adviser Wi Sung-lac said on Friday that the government would talk to U.S. officials in order to provide clear visa guidelines for Korean companies operating there and to ease concerns for workers remaining in the United States, Reuters reported. Wi made the comments as the administration in Seoul seeks to avoid a repeat of a recent U.S. immigration raid on a battery factory that led to the arrest of hundreds of Korean workers.
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In the span of 24 hours last week, President Trump managed to roil both South Korea and Japan, two longtime allies that less than two months earlier had said they would invest a combined nearly $1 trillion in the United States in exchange for lower tariffs, the New York Times reported. Last Thursday, U.S. immigration officials raided the construction site of a major Hyundai-LG plant in Georgia, a flagship project by two of South Korea’s most prominent companies.
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