SEOUL, Dec. 16 (Korea Bizwire) – South Korea’s major conglomerates are most worried about growing protectionism around the globe and an economic policy vacuum following the impeachment of President Park Geun-hye, a survey showed Friday.
In the survey, conducted by Yonhap News Agency on 32 affiliates of the nation’s 30 conglomerates, 16 firms, or 45.7 percent, said the biggest challenge they face next year is global protectionism, followed by the political instability stemming from the impeachment of President Park with 9 firms, or 25.7 percent.
The surveyed firms also cited a slowdown in China, a protracted slump in domestic spending and policy shifts in the upcoming U.S. administration as threats to their business performance.
“Growing political risks at home, combined with protectionism and the upcoming Trump government, seem to be the daunting task for local firms to deal with,” said Park Moon-soo, an analyst at the Korea Institute for Industrial Economics and Trade (KIET).
Earlier this month, the country’s parliament voted to impeach Park, immediately suspending her authority. There have been concerns that Asia’s fourth-largest economy, currently faced with a protracted slump at home and abroad, may be thrown into further turmoil after the impeachment.
Right after Park’s presidency was suspended, Prime Minister Hwang Kyo-ahn stood in as president. The Constitutional Court has to rule within six months whether Park’s presidency should end permanently or she is reinstated.
The surveyed firms also offered a grim outlook for next year’s economic situation with 21 firms, or 65.6 percent, projecting the local economy will grow between 2 percent and 2.5 percent.
Their growth estimate is far lower than the Bank of Korea’s 2.8 percent expansion and the 2.6 percent growth of the Organization for Economic Cooperation and Development (OECD).
Some 28 percent had a more downbeat outlook, expecting the South Korean economy to grow between 1 percent and 2 percent next year.
The survey also showed that 15 firms, or 47 percent, said they would not raise their capital spending but responded that they would hire more next year.