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Lee Kyung-min

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Economy

Global economy to contract 5.2% in 2020: World Bank

By Lee Kyung-min The global economy is expected to shrink 5.2 percent in 2020 due to the COVID-19 pandemic, the World Bank said Monday.In a far grimmer scenario, the bank lowered its outlook by 7.7 percentage points from a 2.5 percent growth forecast made in January.The current crisis, it said, is the deepest global recession since World War II, and almost three times as steep as the 2009 global recession, adding the forecast assumes that the pandemic recedes “in such a way that domestic mitigation measures can be lifted by mid-year, adverse global spillovers ease during the second half of the year, and dislocations in financial markets are not long lasting.”The organization expects that the global economy will bounce back in 2021, growing 4.2 percent.“In all, the pandemic is expected to plunge a majority of countries into recession this year, with per capita output contracting in the largest fraction of countries since 1870,” the Washington-based organization said in a report. If the COVID-19 outbreaks persist longer than expected, restrictions on movement an

Jun 9, 2020By Lee Kyung-min
Global economy to contract 5.2% in 2020: World Bank
Economy

Leveraged stock trading doubles since pandemic

Dealers work at their desks at Hana Bank in Seoul, May 28. Korea Times fileBy Lee Kyung-min The amount leveraged by stock investors nearly doubled over the past two months, an indication that a growing number of people expect a market rally in the months to come.Data from the Korea Financial Investment Association (KOFIA) showed Friday that the amount leveraged stood at 11.4 trillion won ($9.3 billion) as of June 3, almost double from 6 trillion won in late March when the volatile equity market tanked due to fears of COVID-19 burdening the economy.The benchmark KOSPI tumbled to 1,457.64 on March 19, following a couple of sidecars issued by the Korea Exchange to cool down mass panic selling.But with the leading bourse index recovering rapidly and steadily to 2,151.18 on June 4, up nearly 50 percent in two months, the leveraged amount surpassing 11 trillion won signals that investor sentiment has picked up to its level from shortly before the pandemic.“Hopes are high the economic recovery will be sustained partly on the back of the central bank's key rate cut and the government's

Jun 5, 2020By Lee Kyung-min
Leveraged stock trading doubles since pandemic
Economy

Pandemic to push up commercial building vacancy, housing demand

Signs put up on the window of a building read “entire floor for rent” in Jongno-gu, central Seoul. Korea Times fileBy Lee Kyung-min Commercial building vacancy and housing demand will soar due to the rise of online transactions and working from home, brought on by the COVID-19 pandemic, an industry expert said Friday.A preference for contact-free transactions, he added, will drive demand for infrastructure needed for underground transport, among many other city planning initiatives that will bolster disease control and prevention. Home designs will be strengthened with increased functions of leisure, entertainment and creative activities amid reduced outdoor activities, a major change from a place only for rest and sleep, he noted.Hongik University Architectural Design professor Yoo Hyun-joon said a fundamentally different approach is needed on how best to utilize spaces amid increased housing demand and growing commercial vacancies. “Broad city planning is needed to reflect changes in people's behavior and preferences following the pandemic,” he said. The ca

Jun 5, 2020By Lee Kyung-min
Pandemic to push up commercial building vacancy, housing demand
  • Pandemic taking heavy toll on job market
  • COVID-19 forcing GM, SsangYong to unload assets
Banking & Finance

Shinhan, Hana team up to participate in Africa syndicated loan

Shinhan Financial Group Chairman Cho Yong-byoung, right, and Hana Financial Group Chairman Kim Jung-tai hold a signed memorandum of understanding to form a business alliance for global expansion, at Lotte Hotel in Seoul, May 25. Courtesy of Shinhan BankBy Lee Kyung-minShinhan Bank and Hana Bank said Thursday that they had signed a contract with the African Export-Import Bank (Afreximbank) to participate in a $1 billion (1.2 trillion won) syndicated loan arranged by Afreximbank.The joint move by the two major Korean lenders came after Shinhan Financial Group and Hana Financial Group agreed to form an alliance for global expansion, May 25.Provided by a group of lenders, a syndicated loan is structured, arranged and administered by one or several commercial banks or investment banks. The loan will be managed by Afreximbank, a Cairo-based, pan-African multilateral trade finance institution created in 1993 under the auspices of the African Development Bank (ADB).“This will be a great opportunity for both of us seeking to bolster overseas expansion,” a Shinhan official said. &l

Jun 4, 2020By Lee Kyung-min
Shinhan, Hana team up to participate in Africa syndicated loan
Economy

Starbucks Korea under probe over alleged tax evasion

A Starbucks outlet in Jong-no, central Seoul / Korea Times fileBy Lee Kyung-minStarbucks Korea is being investigated over allegations of tax evasion, mostly via overpricing goods and services imported from its head office in the U.S., according to industry and tax administration sources, Thursday.Officials from the National Tax Service (NTS) Seoul Office's international trade investigation department have seized accounting records and data preserved online at the global coffee giant's office in the capital, following multiple searches that began in mid-May. The Korean office allegedly sought to inflate the cost of raw materials such as coffee beans and others products for sale or needed for maintenance at its over 1,370 branches here, in what is widely known as “transfer pricing.”Referring to the rules and methods for pricing transactions within and between enterprises under common ownership or control, transfer pricing has the potential for cross-border transactions to distort taxable income. This is why the tax authorities pay keen attention to whether certain foreign s

Jun 4, 2020By Lee Kyung-min
Starbucks Korea under probe over alleged tax evasion
Economy

Gov't to spend W35.3 tril. in 3rd extra budget

Deputy Prime Minister and Finance Minister Hong Nam-ki, right, speaks during press briefing at the Sejong Government Complex, May 29. Courtesy of Ministry of Economy and FinanceBy Lee Kyung-minThe government presented a 35.3 trillion won ($28.9 billion) extraordinary budget draft today, drawn up to combat any economic collapse brought on by the COVID-19 pandemic.The broad stimulus package seeks to provide firms with liquidity, bolster consumption and strengthen the country's social safety net. Also included is the first step of implementing a digitization- and green-related long-term vision for growth.The largest extra budget to date and the third one set up in 2020 is well over the 28.4 trillion won drafted in 2009 following the global financial crisis and the 13.9 trillion won in 1998 amid the Asia financial meltdown.“The measures will help the country overcome the virus-triggered crisis and lay the foundations for the creation of a new growth engine for the post-pandemic world,” said Deputy Prime Minister and Finance Minister Hong Nam-ki. The Cabinet-approved plan will

Jun 3, 2020By Lee Kyung-min
Gov't to spend W35.3 tril. in 3rd extra budget
Economy

Seoul 'jeonse' price jumps W24 mil.

By Lee Kyung-min The “jeonse” price of apartments in Seoul has increased by 24 million won ($19,500) over the past year, a rapid hike in an uptrend continued over the past few years sustained by soaring demand, as an increasing number of people opt out of buying homes amid regulatory uncertainty.Jeonse is a way of renting a home whereby tenants pay a lump sum as a deposit instead of monthly rent.Data from KB Liiv ON, a real estate information service provider affiliated with KB Kookmin Bank, showed the jeonse price of apartments in Seoul in May stood at 486 million won, up 24.1 million won, or 5.2 percent, from a year earlier. The figure is up by 36.7 million won from two years earlier.The hike was led by Gangnam-gu where the year-on-year jump was over 80 million won, or 11.6 percent from a year earlier. Two other areas in southern Seoul, Seocho-gu and Songpa-gu, saw 48.9 million won and 35.9 million won increases, respectively. Gwangjin-gu, Seongdong-gu, Seongbuk-gu and Yangcheon-gu reported increases between 32 million won and 28 million won.The amount of money needed

Jun 3, 2020By Lee Kyung-min
Seoul 'jeonse' price jumps W24 mil.
Economy

Consumer prices drop on falling oil prices

Grocery prices spike amid lockdowns while deflation concern remains By Lee Kyung-min Consumer prices fell in May due mostly to a plunge in oil prices and increased government welfare spending, while prices of groceries rose sharply as shopping habits were affected by the COVID-19 pandemic, data showed Tuesday.Statistics Korea said consumer prices fell 0.3 percent in May from a year earlier, the second year-on-year drop following September 2019. The price increase rate falling below zero fans fears of deflation ― an overall decline in the general prices of goods and services ― but the government maintains the cause of the price drop stems from supply-side factors and is not demand-oriented. It added that no conclusive inference should be drawn from the May figure alone.The price drop was most pronounced in refined oil products which saw a combined 18.7 percent drop, pushing down the May average by 0.82 percentage points.Chief among them was diesel which saw a price drop of 23 percent, followed by gasoline (17.2 percent) and liquefied petroleum gas (14.4 percent). Prices of oil-based i

Jun 2, 2020By Lee Kyung-min
Consumer prices drop on falling oil prices
Economy

Korea to focus on digital, green initiatives to boost economy

Gov't lowers 2020 growth forecast to 0.1% By Lee Kyung-min The government said Monday that it will invest 76 trillion won ($61.9 billion) by 2025 to strengthen digitization, eco-friendly growth and social safety nets, in a sweeping move to reinvigorate the economy hit by the COVID-19 pandemic. The Ministry of Economy and Finance announced a series of economic directives for the latter half of 2020, aimed mostly at bolstering investment, consumption and exports, coupled with ways to protect low wage earners who are most vulnerable to economic meltdowns.Under the measures dubbed “The Korean New Deal,” about 6.4 trillion won will be spent by 2022 to create 222,000 jobs to set up online platforms in 15 sectors including education and public administration. The workers will manually process around 140,000 publicly managed files for digital storage. "The measures include details on how to quickly overcome the COVID-19 crisis, stimulate consumption for a strong economic recovery, prepare for the post-pandemic era and push for The Korean New Deal," Deputy Prime Minister and Finan

Jun 1, 2020By Lee Kyung-min
Korea to focus on digital, green initiatives to boost economy
  • Moon unveils big-budget 'New Deal' projects to reinvigorate virus-hit economy
  • S. Korea cuts 2020 growth estimate to 0.1%, sees sharp rebound in 2021
Economy

Default concerns grow amid low interest

A loan seeker sits in front of a teller at a branch of Hana Bank in Seoul, April 20. The Korea Times fileBy Lee Kyung-min Economists expressed concerns Sunday over household and corporate debt extended by government-backed lending programs introduced as part of a relief package amid the COVID-19 pandemic.The government-led liquidity injection is more than warranted to fight against a virus-sparked economic shock, but a prolonged fiscal spending and assisted lending lacking “foresight” will lead to a massive chain of defaults from businesses and households, they say.The emergency spending is only as good as the projected growth in the months that policymakers hope would come following the current severe contraction, but a continued delay in the much-needed recovery could entail a deeper-than-feared systemic risk in the economy, they noted.Data from the Financial Supervisory Service (FSS) showed a combined delinquency rate at the country's commercial banks stood at 0.39 percent as of March, up 0.03 percentage points from three months earlier.While the increase is not as gre

May 31, 2020By Lee Kyung-min
Default concerns grow amid low interest
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