[Aju News DB]
South Korean business groups saw their sales falling for the third consecutive year last year due to a protracted economic slump and low oil prices, resulting in a drop in new investments, data showed.
Aggregate sales by South Korea's 65 business groups stood at 1,403 trillion won (1,223 billion US dollars) last year, down 6.8 percent from a year earlier, according to data released by the Fair Trade Commission. Sales fell 0.2 percent on-year in 2013 and 2.0 percent in 2014.
Their total net profit, however, rose sharply to 54.9 trillion won from 47.8 trillion won 2013 and 42.1 trillion won in 2014, reflecting inactive investments and efforts to improve their balance sheet through sales of non-core assets.
Data compiled by Statistics Korea and the Bank of Korea (BOK) showed corporate investment in the country's gross domestic product (GDP) plunged to a 39-year low last year while private consumption plunged to their lowest level in 27 years.
Gross fixed capital formation accounted for 29.1 percent of GDP in 2015, down 0.1 percentage point from a year earlier. The corporate investment-GDP ratio has declined steadily since it posted 31.4 percent in 2008.
South Korean exports posted an 8.2 percent on-year drop in March, marking the 15th consecutive month of declines, mainly due to sluggish shipments of petrochemical and oil-related products.
Industrial output rose 2.4 percent on-year in February, ending a three-month losing streak, but officials cautioned that there are no signs of better performance afterwards.
BOK Governor Lee Ju-yeol has said the country’s economy is recovering at a slower pace than earlier thought and may miss its growth forecast of three per cent for this year, citing weak exports and slowing consumption.
With exports showing no sign of improving, the central bank has kept interest rates on hold at a record low 1.5 percent.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
