Last month, economic sentiment, which had been on an upward trajectory, faltered for the first time in four months as a combination of a weak won and rising inflation weighed on the economy. The photo shows an employee sorting U.S. dollar bills at Hana Bank’s Counterfeit Response Center in Jung-gu, central Seoul. (Yonhap)
SEOUL, Jan. 13 (Korea Bizwire) – Around 40 percent of South Korean manufacturers expect economic conditions to deteriorate this year amid increased volatility in the foreign exchange (FX) market, a poll showed Tuesday.
According to the poll conducted recently by the Korea Chamber of Commerce and Industry (KCCI) on 2,208 manufacturing firms, a total of 40.1 percent of respondents said they expect a deterioration in economic conditions.
In detail, 14.7 percent of respondents pointed to a clear deterioration, while 25.4 percent expected a slight downturn.
Of the respondents, only 23.6 percent said they expect an improvement, while 36.4 percent said conditions would remain unchanged from 2025.
The KCCI said 47 percent of respondents cited the strengthened U.S. dollar and growing volatility in the FX market as major drags on the South Korean economy.
Other major concerns included volatility in crude oil and raw material prices, as well as trade uncertainties stemming from policies of U.S. President Donald Trump’s administration.
Citing such risks, only 20 percent of respondents said they plan to expand their operations this year, while 67 percent said they would maintain the status quo.
Per sector, 47 percent of companies in the semiconductor industry, currently enjoying an industrywide supercycle boom, said they plan to expand their businesses this year.
Pharmaceutical and cosmetics firms also painted an overall optimistic outlook, with 39.6 percent and 39.4 percent of firms in the sectors, respectively, saying they plan to expand their businesses this year.
“Despite expectations that exports and domestic consumption will recover simultaneously this year, businesses are set to maintain a prudent management stance due to uneven recovery across industries and a strong U.S. dollar,” Kang Seok-koo, head of the research division at the KCCI, said in a release.
(Yonhap)
