International News

Millions Small Businesses In South Korea Have Gone Bankrupt

Author : Bozhou Marine

Update time : 2024-07-18 09:30:57

According to statistical results, the total number of units (individuals and legal entities) applying for business closure registration in South Korea in 2023 reached 986487, an increase of 119195 compared to the same period last year, setting a record high since relevant statistics began in 2006.

According to reports, based on the reasons for business closures, "bad business" ranked first with 482183, a year-on-year increase of 18.7%. By industry, the retail industry ranks first with 276535 units registered for suspension, followed by the service industry (217821), catering industry (158279), and so on.

According to analysis, the increase in the number of business registration closures mainly reflects the long-term high interest rates and sluggish domestic demand in South Korea, and the termination of government subsidies for the epidemic has also had a certain impact.

In addition, the number of self-employed individual businesses in South Korea decreased by 114100 in the second quarter of 2024 compared to the same period last year, the highest decline in nearly 8 and a half years.

At present, the South Korean economy is facing the challenge of "sticky inflation", which means that the duration of price increases is longer than expected and it is difficult to decline

Sticky inflation is an economic phenomenon. Simply put, once prices rise, they are not easy to fall, and even if the economic environment changes, prices tend to remain at a relatively high level.

Affected by "sticky inflation", it is expected that the "three highs" of high prices, high interest rates, and high exchange rates in South Korea will continue for a longer period of time. Although many in South Korea predict that the high price phenomenon will ease from this year, the latest released price index and forecast are not optimistic. Bank of Korea expects a consumer price increase rate of 2.6% this year, but it will fluctuate between 2.9% and 3% in the first half of the year.

Under the influence of factors such as high prices and high household debt ratios, the situation of South Korean people's wallets is not optimistic.

Chinese cross-border e-commerce enterprises, which have the main advantage of "high cost-effectiveness", have also emerged as a rising force and achieved rapid development, occupying "half of the Korean overseas direct purchase market".

The pursuit of good quality and low price, as well as high cost-effectiveness, has become a consumption trend among the Korean people, and consumption downgrade has naturally become an inevitable result.

According to data released on July 11th by the National Statistics Portal (KOSIS) of the South Korean Statistics Agency, the number of "unemployed" people in the 20-year-old age group in South Korea reached 395000 last month, an increase of 38000 people (10.6%) year-on-year. The 'unemployed' population in the 30-year-old age group increased by 29000 people (11.4%), reaching 285000 people.

Data shows that the overall "unemployed" population in South Korea is 2.374 million, an increase of 129000 people (5.7%) year-on-year, and has been growing for four consecutive months.

'Unemployed' refers to the population in the economically active population survey conducted by the Department of Statistics, who, although not suffering from illness or disability, answer 'just resting' among the non economically active population.

The total number of "unemployed" people in their 20s and 30s is 680000, an increase of 67000 from 613000 in the same period last year, which is the highest historical value in June since relevant statistics began in 2003.

In sharp contrast to young people in South Korea, the employment rate of the population aged 70 and above has exceeded 30% for the first time, reaching a historic high.

On the 15th, the Korean newspaper Chosun Ilbo reported that with the increasing prevalence of late employment, late marriage, and late childbirth in South Korea, the number of elderly people over the age of 70 who are still working is also constantly increasing.

In the first half of this year, the average monthly employment in South Korea was 28.45 million, an increase of 220000 compared to the same period last year. Among them, the number of employed people aged 70 and above increased by 150000, reaching 1.925 million, which is the fastest growing among all age groups. This is also the first time that the number of employed people aged 70 and above has increased beyond the age group of 60.

Most people over the age of 70 who plan to continue working tend to work part-time for 4-5 hours a day, considering their health condition. The main reason why elderly people continue to work is due to economic needs. Among the respondents aged 55-79 who plan to continue working, over half (55.8%) stated that they intend to postpone retirement to make up for insufficient pension income.

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