The triple impact of inflation, a high exchange rate, and high-interest rates have put many companies in Busan under financial strain, with some facing short-term liquidity risks. Recently, the Busan Chamber of Commerce and Industry (BCCI) released the results of its ‘Emergency Management Status’ survey, targeting local listed companies in the manufacturing, service, and construction industries with sales of over 50 billion won.
The survey revealed that 84.9% of respondents reported negative effects on their businesses due to increased cost burdens caused by the triple challenge of high-interest rates and liquidity difficulties resulting from the economic downturn. While the high exchange rate was not seen as a major concern by most respondents, exporters with global competitiveness viewed it as a positive factor due to exchange rate gains.
The survey also found that 41.1% of respondents believed emergency management was necessary, even among relatively large local companies. This sentiment is expected to be even higher among SMEs and micro-enterprises, which are likely to face challenges securing orders due to the successive declarations of emergency management by larger companies.
Currently, 39% of companies are considering or have already implemented emergency management strategies, with 15.2% of those surveyed stating they are experiencing difficulties securing short-term liquidity. Among the emergency management response strategies, securing liquidity and reducing costs accounted for the highest proportions of 30.4% and 27.0%, respectively, followed by adjusting production (16.9%), reducing investment (14.2%), and adjusting employment (11.5%).
An official from the Economic Trends Analysis Center in Busan emphasized the need for bold financial support to prevent further liquidity shortages among companies due to high-interest rates. With major countries such as the US attempting to stabilize prices by raising interest rates to recover liquidity, local companies in Busan are facing a recession that requires immediate attention and support.