S. Korean biz failures drop for 5th month

By Park Bo-ram
SEOUL, June 21 (Yonhap) -- The number of South Korean firms filing for bankruptcy
declined in May from the previous month as the nation's economic stimulus
policies bolstered their financial positions, the central bank said Sunday.
Business failures dropped to 151 last month, the lowest in 20 months, compared
with 219 in April, according to the report by the Bank of Korea (BOK). The number
of corporate bankruptcies decreased for the fifth month in a row since hitting
345 in December, the highest level in four years, the report said.
"The continued fall in business failures indicates an improvement in their
financial conditions as the government pushed for perk-up measures, including
credit guarantees and interest rate cuts," said a BOK official.
The BOK left its key interest rate unchanged at 2 percent in May, the lowest
since it began rate-setting a decade ago. The central bank cut a total of 3.25
percentage points during the October-February period.
The number of business start-ups stood at 4,029 in May, down from 5,038 the
previous month, the BOK said.
The default rate of corporate bills -- bonds, checks and promissory notes --
reached 0.04 percent last month, up 0.01 percentage point from the previous
month, it added.
The South Korean economy narrowly averted a recession in the first quarter by
growing 0.1 percent from the previous three months.
The BOK expects Asia's fourth-largest economy will contract 2.4 percent this year
from a year earlier, pummeled by falling exports and local demand.
pbr@yna.co.kr
(END)