90% of SME CEOs Predict Bleak Domestic Economic Outlook This Year

COVID-19 and Global Economic Growth Slowdown Cited as Major Factors
Korea Federation of SMEs, "COVID-19 Causes Domestic Demand Contraction...Need to Ease Business Regulations"

On the 6th, at the Korea Federation of Small and Medium Business in Yeouido, Seoul, Kim Ki-moon, the chairman of the Korea Federation of Small and Medium Business, is delivering a statement regarding the enactment of the Serious Accidents Punishment Act. [Image source=Yonhap News]

[Asia Economy Reporter Kim Suhwan] The majority of executives at domestic small and medium-sized enterprises (SMEs) have expressed a pessimistic outlook, expecting the economic situation this year to be bleak.

According to the Korea Federation of SMEs on the 13th, in the '2021 Business Outlook Survey by SME CEOs' conducted from the 4th to the 7th among 411 SME CEOs, 89.5% of the surveyed companies responded that the domestic economic outlook this year would be similar to or worse than last year. Only 10.5% of SMEs answered that it would be favorable.

The main reasons cited for expecting a worse economic outlook this year compared to the previous year were domestic and external factors, with the prolonged sluggish domestic demand due to COVID-19 (86.7%) and the global slowdown in growth rates (75.0%) being the most frequently mentioned. Additionally, most SMEs anticipated their sales revenue this year to be similar (47.4%) or decreased (37.0%) compared to last year, indicating that the pessimistic economic outlook is expected to impact business conditions.

Other major internal and external factors expected to have the greatest impact on management this year (multiple responses allowed) were the overall recovery of economic sentiment (71.0%), government policy support (46.2%), and the fulfillment of business operation requirements such as labor costs and operating funds (33.6%), in that order.

The SME support policies desired from the government and National Assembly this year (multiple responses allowed) were activation of domestic demand support (48.2%), strengthening of policy finance (43.8%), deregulation (38.2%), and supplementation of the 52-hour workweek system (27.5%), respectively.

Regarding this survey, Choo Moon-gap, Head of the Economic Policy Division at the Korea Federation of SMEs, stated, "The prolonged COVID-19 pandemic has caused domestic demand contraction and external uncertainties, negatively affecting business outlooks," and added, "It is necessary to prepare supplementary legislation for regulatory bills such as the 52-hour workweek system and the Serious Accidents Punishment Act."

This content was produced with the assistance of AI translation services.