South Korea: Record 1 million shop owners close businesses in 2024

Seoul, July 6 (IANS) The number of business owners that closed down their shops surpassed the 1 million mark for the first time in history last year, with the retail and eatery sectors accounting for nearly half, data showed on Sunday.

According to the data compiled by the National Tax Service, 1,008,282 individual and corporate businesses filed for closure in 2024, up 21,795 from the previous year.

It marks the first time business closures have topped 1 million since record-keeping began in 1995, reports Yonhap news agency.

The tax agency said business closures have been on the rise since 2023, partly attributing the surge to what it called an "accumulated slump" during the COVID-19 pandemic and rising delinquency rates caused by high interest rates.

The business closure rate has also been on the rise since 2023, reaching 9.04 percent last year, slightly up from 9.02 percent the previous year, according to the agency.

The most cited reason for business shutdowns was slumping sales, which accounted for roughly half of the total.

Retail businesses have been especially hard hit by the recent economic downturns, accounting for 29.7 percent of all business closures, followed by restaurant businesses at 15.2 percent, real estate at 11.1 percent, and wholesale companies and commodity brokerages at 7.1 percent.

The business closure rate for retail businesses stood at 16.78 percent, followed by restaurant businesses at 15.82 percent and personal services at 14.11 percent.

"Continued high interest rates and inflation have reduced real income, leading to declines in retail sales and spending in eateries," said Kim Kwang-seok, head of economic research at the Institute for Korean Economy and Industry.

Meanwhile, South Korean stocks finished markedly lower on Friday, as investors took a breather following recent gains while watching developments in tariff talks with the United States. The local currency fell against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) fell 61.99 points, or 1.99 percent, to close at 3,054.28.

—IANS

na/