S. Korea's Q1 facility investment sinks to 2002 level

SEOUL, May 19 (Yonhap) -- South Korea's facility investment in the first quarter
shrank to the level seen in 2002 amid a protracted economic slowdown, the central
bank said Tuesday, raising concerns over sluggish domestic demand.

The country's corporate capital spending reached 17.7 trillion won (US$14.1
billion) in the January-March period, down 22.1 percent from a year earlier,
according to the Bank of Korea (BOK). It declined to a similar level posted in
the first quarter of 2002 when facility investment amounted to 17.5 trillion won,
it added.
The data comes as the South Korean economy is forecast to contract 2.4 percent
this year, the worst performance in 11 years, stung by falling exports and
sluggish domestic demand.
Last month, the parliament endorsed a record 28.4 trillion won extra budget aimed
at generating jobs and bolstering domestic demand. The BOK has slashed its key
interest rate by 3.25 percentage points since October to a record low of 2
percent.
Amid slumping facility investment, South Korea's overseas payments for fees
including patent rights reached $1.32 billion in the first quarter, down 18.4
percent from the previous year, it added. Based on the first quarter, the
readings marked the steepest fall since the first quarter of 2001 when such
payments declined 22.5 percent, it said.
sooyeon@yna.co.kr
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