40 pct of conglomerates plan to reduce investment in 2023: survey


(union)

More than four out of 10 South Korean conglomerates are planning to cut back on domestic and foreign investments this year amid a slowing global economy and worsening market conditions, according to a survey by the state-owned Trade Administration. I was.

According to a recent survey by the Korea International Trade Association (KITA), 47 percent of 1,327 companies with over $500,000 in overseas sales last year expect the business environment to worsen this year. About 16.9% of respondents expect a turnaround.

Amid such a pessimistic outlook, 29.5% of enterprises decided to cut domestic investment in the New Year, and 27.5% decided to cut overseas investment.

The survey found that 43% of large companies said they would scale back their investments, both domestically and internationally.

By sector, the study found that 45% of the semiconductor companies surveyed, the largest share of all sectors, said they would cut new investment in 2023.

An official of KITA said, “A decline in investment by major conglomerates could undermine the overall performance of exports and the competitiveness of companies in the global market. Various tax incentives and other incentives are being implemented to revitalize investment sentiment. We need to take urgent action,” he said.

South Korea has suffered in recent months from a global recession caused by soaring energy prices, supply chain disruptions and aggressive monetary tightening, weakening export momentum and widening its trade deficit.

In 2022, the country’s exports grew by 6.1% year-on-year, but the annual trade deficit was the largest ever. December exports fell 9.5%, the third straight month of decline.

The government said it expects exports to fall by 4.5% in 2023. The Bank of Korea predicted in November that the domestic economy would grow by 1.7% in 2023.

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