[Yonhap News Photo]
The International Monetary Fund (IMF) put the estimated cost of South Korea's ongoing corporate restructuring drive at 31 trillion won (27 billion US dollars), saying it will be offset by various benefits in a decade, according to a recent report.
It used loss given default (LGD) data for corporate debts and employment impact assumptions under a scenario that corporate restructuring in Asia's fourth-largest economy will proceed in the most effective manner.
"Our method gives that cost at about 31 trillion won in the adjusted baseline," it said in the report on the benefits and costs of the county's corporate restructuring.
South Korea is currently engaged in full-fledged restructure of its shipbuilding and shipping industries amid mounting debts attributable to fierce industrywide competition.
"Benchmark results for Korea suggest 5.5-7.5 percent of GDP creditor losses and a 0.4-0.9 percent of the labor force employment impact from the debt restructuring," the IMF said.
The benchmark scenario covered actual 2014 earnings and a 10 percent decline in corporate earnings as a confidence range. But the IMF predicted that it will lead to such mid- to long-term benefits as higher corporate investment and hiring under any presumed scenario.
(Yonhap)
reporter
Park Sae-jin
swatchsjp@ajunews.com
