Seoul: Nearly 80 percent of South Korea's 120 major companies plan to maintain their investment levels in the second half of the year, similar to those in the first half, amid growing uncertainties in the business environment, a recent survey showed Wednesday.
According to Yonhap News Agency, the survey released by the Federation of Korean Industries (FKI) revealed that 78.4 percent of responding companies, drawn from the country's top 500 firms by sales, intend to keep their domestic investment plans unchanged in the second half compared to the first half.
"Companies have shown a cautious approach to new investments due to increasing export uncertainties and sluggish domestic consumption. Nevertheless, the new administration's stimulus measures and expectations of a market recovery appear to be prompting many firms to maintain their first-half investment scale," an FKI official commented.
Meanwhile, 13.3 percent of the respondents indicated plans to reduce investment during the second half, whereas 8.3 percent expressed intentions to increase spending. The companies planning to cut back investments cited rising uncertainties related to shifting policies under the second U.S. administration under President Donald Trump, alongside a continued domestic market slowdown and risks from foreign exchange volatility and increased raw material costs.
Conversely, firms intending to boost investment pointed to anticipated policy shifts under the new Lee Jae Myung administration, the necessity to upgrade aging facilities, and optimism about improving market conditions. When questioned about potential risks affecting investment in the second half, respondents noted concerns about an economic slowdown in key markets such as the United States and China, increasing global supply chain instability, rising energy and raw material prices, and tightening financial markets.