Historic Drop
The revenues of Korean large businesses have dropped on the largest scale in 12 years since the “Card Crisis” in 2003.
According to a Bank of Korea report titled “Business Performance Analysis in the First Quarter” released on July 2, the sales of Korean large businesses fell 5.5 percent during the January-March period from a year earlier. The figure is worst since the third quarter of 2003 (-6.3 percent), when the national economy suffered from the Card Crisis, SARs, and the Iraq War. The figure is also higher than the 4 percent drop during the global financial crisis in 2008.
“Large businesses are destined to be influenced by exports, and price factors such as fluctuations in oil prices and foreign currency exchange rates,” said Park Seong-bin, who heads the Corporate Statistics team at the central bank.
“In particular, shipments of cars and smartphones were the most sluggish amid an overall global sluggish demand,” Park added.
The nation’s outbound shipments continued to shrink in June, falling 1.8 percent from a year ago, marking a drop for six consecutive months. The Middle East Respiratory Syndrome (MERS) outbreak is expected to further hamper growth this year.