Number of bankruptcies falls for 3rd month in March

SEOUL, April 19 (Yonhap) -- The number of South Korean corporate bankruptcies
dropped in March for a third month thanks to a set of economic stimulus measures
and liquidity supply, the central bank said Sunday.

Business failures totaled 223 last month, down 7 from the previous month,
according to the Bank of Korea (BOK). The figure declined for three months
running after hitting a near four-year high in December, it added.
"A series of actions by the government and the central bank -- liquidity supply,
credit guarantee and rate cuts -- had some effects on the economy," said Lee
Bum-ho, an official at the BOK said. "But it is too early to say that the figure
represents a downward trend because economic uncertainty lingers and a corporate
restructuring drive is under way."
Last month, the government announced a 28.9 trillion won (US$21.7 billion) extra
budget, the biggest ever, aimed at creating more jobs and jump-starting the
sputtering economy. The BOK had made six consecutive rate reduction to a record
low of 2 percent until February.
The number of start-ups, meanwhile, rose by 337 to 4,564 in March. The ratio of
start-ups to business failures reached 30.8, hitting the highest level since July
2008 when the rate reached 34.1, the BOK said.
The default rate of corporate bills -- bonds, checks and promissory notes -- was
0.05 percent last month, up 0.01 percentage point from the previous month, it
added.
The South Korean economy shrank 5.1 percent on-quarter in the October-December
period, the worst performance in 11 years, due to tumbling exports and sluggish
domestic demand. The BOK predicted that Asia's fourth-largest economy will
contract 2.4 percent this year.
sooyeon@yna.co.kr
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