Seoul: Loans extended to companies in South Korea grew at a slower pace in the second quarter compared with the previous quarter amid a sluggish construction sector and high base effects, central bank data showed Friday. The outstanding loans extended to local companies had come to 1,994.0 trillion won (US$1.43 trillion) as of end-June, up 14.5 trillion won from three months earlier.
According to Yonhap News Agency, this increase signifies a deceleration from the previous quarter, when the loans expanded by 17.3 trillion won due to surging demand for operating funds. By sector, loans to manufacturing firms rose by 6 trillion won from three months earlier to 497.4 trillion won as of end-June, while those in the service sector expanded by 7.2 trillion won to reach 1,268.8 trillion won.
However, loans in the construction sector contracted by 200 billion won to 103.8 trillion won, marking the fourth consecutive quarterly decline. By purpose, operating funds increased by 8.8 trillion won in the second quarter, following a 9.5 trillion-won gain in the first quarter. Facility investment loans advanced by 5.7 trillion won, showing a slowdown from a 7.8 trillion-won increase seen in the previous quarter, the data revealed.