S. Korean firms believe crisis similar to or worse than 1997

SEOUL, Oct. 27 (Yonhap) -- Nearly four-fifths of South Korean companies think they are experiencing business challenges similar to or worse than they endured during the Asian financial crisis in late 1990s, a poll showed Monday.

As the U.S.-sparked global financial crisis is biting into the nation's real
economy, woes over economic hardship are resurfacing South Korea, which was
forced to receive a humiliating bailout from the International Monetary Fund a
decade ago.
The survey, conducted by the Korea Chamber of Commerce and Industry (KCCI), a
business lobby organization, found 42.5 percent of the 300 companies surveyed
business conditions are similar to those in the 1997-98 Asian financial crisis
and 36.4 percent said business conditions are more difficult.
Asked about the reasoning behind their pessimism, 54.2 percent cited a prolonged
downturn in domestic consumption on fears of a global economic recession, while
20.4 percent cited difficulties in borrowing money from banks.
"In the wake of the global financial crisis, South Korean firms are grappling
with an economic downturn, liquidity shortages and poor earnings," the KCCI said
in a statement.
Earlier in the day, the Bank of Korea slashed its key interest rate by a
greater-than-expected 75 basis points to 4.25 percent in an unscheduled
monetary-policy meeting to help ease liquidity shortages for local banks and
boost the economy.
The cut was the biggest by the central bank since it began adopting a benchmark
interest rate in 1999.
(END)