3 in 10 exporters suffer worse financial situation this year: poll

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Nearly three in 10 Korean exporting companies have seen their financial situation worsen this year due to the COVID-19 pandemic and other negatives, a poll showed Monday.

The survey of 102 manufacturing exporters out of the country's top 1,000 firms by sales showed 31.4 percent of respondents saying their financial situation has become worse this year compared to 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, 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 (37.5 percent) and increases in debt-servicing costs (9.4 percent).

The federation said the 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 condition.

About two week ago, the U.S. Fed raised its key interest rate 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 rises 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 Korean currency against the U.S. dollar has negatively impacted their financial situation.

Thirty-two percent of respondents said 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. (Yonhap)