SEOUL, March 28 (Korea Bizwire) — Nearly three in 10 South Korean exporting companies have seen their financial situation worsen this year due to the coronavirus pandemic and other negatives, a poll showed Monday.
The survey on 102 manufacturing exporters out of the country’s top 1,000 firms by sales showed 31.4 percent of the respondents saying their financial situation has gotten worse this year than in 2021.
About 55 percent answered their financial conditions are similar to those a year earlier, with about 14 percent reporting improvements.
The survey was conducted by the Federation of Korean Industries, or the lobby for local family-controlled conglomerates, called “chaebol” here.
Sluggish sales have been cited as the main reason for their worsened financial situation (39.6 percent), followed by rising costs with 37.5 percent and an increase in debt-servicing costs with 9.4 percent.
The federation said those exporting companies have been hit by weakening sales stemming from the coronavirus pandemic, rising interest rates and higher international raw material prices.
According to the findings, more than 80 percent of the surveyed exporters said interest rate hikes and increasing materials costs have had a negative impact on their financial conditions.
About two week ago, the U.S. Fed raised its key interest rates by a quarter percentage point from near zero.
In mid-January, the central Bank of Korea raised the country’s policy rate by a quarter percentage point to 1.25 percent, the third rate increase since August, with analysts expecting more rate raises this year.
Those exporting companies responded their interest costs will likely expand 8.3 percent this year from a year earlier.
In addition, nearly 65 percent of the polled corporations said the weakening of the South Korean currency against the U.S. dollar has negatively impacted their financial situation.
Some 32 percent of the respondents said South Korea’s central bank should adjust the pace of its interest rate increases down the road to help them manage finances stably and raise funds, according to the survey.