S. Korean biz failures dip to record low in June

SEOUL, July 19 (Yonhap) -- The number of South Korean corporate bankruptcies
declined to an all-time low in June as corporate financial conditions improved on
a set of stimulus packages and rate cuts, the central bank said Sunday.
Business failures totaled 125 last month, down 26 from the previous month in the
sixth straight monthly fall, according to the Bank of Korea (BOK). The figure was
the lowest level since January 1990, when the BOK began to compile related data.
"Funding conditions for smaller companies continued to improve on the back of a
set of measures by the government and the central bank -- credit guarantees and
rate cuts," said Lee Bum-ho, an official at the BOK.
The government and the BOK have been scrambling to boost the slumping economy by
unveiling large-scale fiscal spending and trimming the policy rate. The BOK cut
its key rate by 3.25 percentage points to a record low of 2 percent between
October and February.
The number of start-ups, meanwhile, climbed by 1,363 to 5,392, hitting an over
four-year high. The ratio of start-ups to business failures reached 64.2, marking
the highest level since the 1997-98 Asian financial meltdown, it added.
The default rate of corporate bills -- bonds, checks and promissory notes --
reached 0.02 percent last month, down 0.02 percentage point from the previous
month.
The South Korean economy averted a recession, or two straight quarters of
contraction, in the first quarter by growing 0.1 percent from three months
earlier. The BOK said last week that Asia's fourth-largest economy is estimated
to have grown 2.3 percent on-quarter in the April-June period.
The central bank upgraded its growth outlook to a 1.6 percent contraction this
year, up from the previous estimate of a 2.4 percent fall. The government
projected a 1.5-percent decline.
sooyeon@yna.co.kr
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