Companies Forecast 1.6% Growth Next Year... 8 Out of 10 Say "Interest Rates Should Not Be Raised Further"

Containers loaded with import and export cargo are piled up at Busan Port's Sinsundae Pier and Gammam Pier.

[Asia Economy Reporter Choi Daeyeol] A survey revealed that a significant number of domestic companies have not established their business plans for next year. Among the companies that have prepared plans, more than 90% are understood to be preparing to maintain the status quo or implement austerity management.

According to the Korea Employers Federation's survey on next year's business outlook, conducted on 240 companies with 30 or more employees nationwide, about 54% of the responding companies have finalized their plans or drafted preliminary versions. On the other hand, about 46% answered that they have not even drafted preliminary plans yet.

Among the companies that established management plans, 69% said they would maintain the status quo, and 22% are preparing for austerity management. Only about 9% of companies responded that they would pursue expansion management. Regarding austerity management methods, the most common response was company-wide cost reduction (72%), and many companies were also preparing to secure liquidity and rationalize workforce management.

Among the companies that made plans, many answered that their investment and hiring plans would be similar to this year. As for the expected timing for the Korean economy to return to a normal track, 74% selected after 2024, the highest proportion. The average forecast for economic growth rate was only 1.6%. Regarding the current benchmark interest rate of 3.25%, 82% of respondents said it should be lowered or maintained at the current level.

In a survey asking about companies' financial conditions, 43% answered that it was difficult. Those who expected conditions to worsen next year accounted for 51%. It was anticipated that if the government's reform plan to lower the corporate tax top rate from the current 25% to 22% is passed, reducing the corporate tax burden, there would be effects such as job creation and investment expansion.

Ha Sangwoo, head of the Economic Research Department at the Korea Employers Federation, said, "Since next year's economic situation is expected to be more difficult than this year, it is urgent to prepare measures that can revitalize companies," adding, "We need to improve tax and labor market systems so that our companies do not compete under at least disadvantageous conditions compared to companies from other countries in the global market."

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