Personal and corporate bankruptcies in South Korea increased by more than 10 percent last year, data showed Monday, reflecting the economic impact of COVID-19 on both businesses and households, the Korea Herald reported. According to the report released by the National Court Administration, the number of personal bankruptcies filed in 2020 rose by 10.4 percent from the previous year, from 45,654 cases to 50,379 cases. Last year’s tally was the biggest figure since 2015.
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South Korea’s leading opposition candidate warned of a potential collapse in the housing market and a spike in bankruptcies as interest rates rise, blaming President Moon Jae-in for letting debt levels hit a record through expansionary spending, Bloomberg News reported. Hong Joon-pyo, one of the top-ranked conservatives seeking to be the next president, said the current level of fiscal spending is unsustainable with government debt expected at over 1,000 trillion ($855 billion) next year.
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South Korea became the first major Asian economy to raise interest rates Thursday, with more hikes in the pipeline as its central bank indicated that financial risks pose a bigger threat to the economy than the latest virus outbreak, Bloomberg News reported. Governor Lee Ju-yeol said the quarter-percentage-point hike to 0.75% still left rates in an accommodative position that supports the economy. He added that the current delta wave is having less of a negative impact on growth as consumers adjusted behavior to the new normal of the pandemic.
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South Korea’s ballooning household debt set new records last quarter, offering support for views that the central bank will raise interest rates as early as this week to deflate a debt bubble, Bloomberg News reported. Total credit extended to households jumped 10.3% from a year earlier to 1,806 trillion won ($1.54 trillion), according to a Bank of Korea statement on Tuesday. The 169 trillion won increase marked the largest gain since data going back to 2003. From the previous three months, credit rose by 41.2 trillion won, the biggest increase for an April-June quarter.
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South Korea's consumer inflation accelerated in July, staying at a nine-year peak marked in May, as hot weather conditions lifted prices of fresh food, while oil products and housing rental and other services costs continued rising, Reuters reported. The consumer price index (CPI) last month rose 2.6% year-on-year, Statistics Korea data showed on Tuesday, accelerating from a 2.4% increase in June and beating a 2.4% increase tipped in a Reuters survey.
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South Korea has recouped 69.7 percent of the public funds it spent to bail out troubled financial firms since the 1997-1998 Asian financial crisis, the financial regulator said Monday, the Yonhap News Agency reported. The country retrieved 327.9 billion won (US$284.3 million) in the second quarter out of the 168.7 trillion won in state funds spent to save firms from bankruptcy, according to the Financial Services Commission (FSC). The recovery rate was up from 69.5 percent recorded at the end of March, it added.
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The daughter of former Seoul Mayor Park Won-soon said her father left behind mountains of debt because he gave away the family fortune to various organizations, including women's groups, before he died last year, UPI reported. Jung Chul-seung, the family's legal counsel, said that the statement from the woman, who remains unidentified, was part of a recent conversation, Dong-A Ilbo and Asia Business reported.
Bank of Korea Governor Lee Ju-yeol said the central bank will discuss raising its key interest rate from its next meeting in August after playing down the likelihood that the latest virus surge will dent the economy’s recovery, Bloomberg News reported. While the bank left rates unchanged at 0.5% at its policy meeting on Thursday, a call for a quarter percentage point hike from one member helped send Korea bond futures plunging and strengthened the won as investors boosted their hawkish bets for the BOK to move early.
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SsangYong Motor's painful restructuring plan is raising the possibility that the ailing South Korean vehicle manufacturer may woo potential investors, the Korea Times reported. Early this month, its union and management reached an agreement to apply cost-cutting measures such as initiating unpaid leave and additional wage cuts for executive-level employees.
South Korea exports logged their sharpest expansion in 32 years in May, marking another robust month of shipments fuelled by stronger consumer demand globally as many economies start to reopen, Reuters reported. Surging chip and car shipments helped power a 45.6% surge in South Korea's exports from a year earlier, government data showed on Tuesday, posting the fastest growth since August 1988 and extending their expansion to a seventh month in a row.