S. Korean SMEs concerned about 'exit strategy' fallout: poll

SEOUL, Dec. 25 (Yonhap) -- South Korea's small- and medium-sized enterprises
(SMEs) are concerned about fallout from the country implementing an exit strategy
to preempt inflation in 2010, a poll showed Friday.

The IBK Economic Research Institute said 85 percent of 3,070 companies polled in
the country are concerned that interest rates may rise if the government
withdraws excess liquidity from the market.
Only 8.4 percent said they will not be affected by higher interest rates in the
future, it said.
SMEs have warned the government not to move too quickly to implement its exit
strategy, since the economy has not fully recovered from the worldwide financial
crisis triggered by the collapse of Lehman Brothers in 2008.
Lawmakers approved a record 28.4 trillion won (US$24.1 billion) extra budget in
late April to help stabilize the economy that may pull off 0.2 percent growth
this year.
The huge influx of money into the market, however, has raised fears of inflation.
The government said that it may take steps to reel in excess liquidity in the new
year, although no details have been announced on how such steps will implemented.
The institute under the Industrial Bank of Korea, meanwhile, said the business
survey index (BSI) for SMEs in 2010 reached 115, up sharply from the 76 forecast
for this year. A BSI reading of over 100 means optimists outnumber pessimists.
By industry, the BSI reading reached 130 for chemical companies, followed by
precision and medical equipment producers.
Meanwhile, transportation and beverage manufacturers tallied BSI readings of 80
and 99, respectively, indicating those industries expect tough times next year.
yonngong@yna.co.kr
(END)