SEOUL, Jan. 3 (Korea Bizwire) – South Korean companies will likely face a wide range of new and prolonged risks that will make their very survival a challenge this year, a survey showed Tuesday.
In a recent survey conducted by the Korea Chamber of Commerce and Industry (KCCI), 92.3 percent of some 50 local experts polled expected local companies to see their annual sales remain unchanged or even shrink from last year.
“Amid concerns over U.S. rate hikes and China’s growing debts, all major markets appear to be moving to reduce their spending,” said Kwon Nam-hoon, an economics professor from Seoul’s Konkuk University.
Professor Park Chang-kyun from Chung Ang University noted the firms will find little relief in the domestic market.
“Their very survival will be their key issue for some time,” he said.
When asked to pick a multiple number of possible risks facing local firms this year, 69.2 percent said continued U.S. rate hikes will create a major problem for South Korean businesses, while 57.7 percent answered China’s slowing economic growth will be a serious external risk.
More than 7 out of every 10 people surveyed expected the U.S. Federal Reserve to raise its policy rate by 0.5 percentage point this year.
Nearly 89 percent of those surveyed forecast China’s economic growth will slow to the low 6 percent range from an estimated 6.6 percent on-year expansion in 2016.
With an anticipated slump at home and abroad, the experts also offered means of survival as key words to guide local companies this year.
When asked about the most urgent issue the government must address this year, 46.2 percent pointed to corporate restructuring, while another 42.3 percent picked industrial restructuring. Only 7.7 percent answered people’s livelihoods came before all others.