Seoul: Around 40 percent of South Korean manufacturers expect economic conditions to deteriorate this year amid increased volatility in the foreign exchange (FX) market, a poll showed Tuesday.
According to Yonhap News Agency, the poll conducted recently by the Korea Chamber of Commerce and Industry (KCCI) on 2,208 manufacturing firms revealed that a total of 40.1 percent of respondents anticipate a worsening in economic conditions. Specifically, 14.7 percent of respondents noted a clear deterioration, while 25.4 percent expected a slight downturn.
In contrast, only 23.6 percent of those surveyed foresee an improvement, while 36.4 percent believe conditions will remain unchanged from 2025. The KCCI highlighted that 47 percent of respondents identified the strengthened U.S. dollar and growing FX market volatility as significant challenges for the South Korean economy.
Additional concerns include fluctuations in crude oil and raw material prices, alongside trade uncertainties linked to U.S. policies under President Donald Trump's administration. Due to these risks, only 20 percent of respondents plan to expand operations this year, with 67 percent opting to maintain the status quo.
By sector, 47 percent of companies in the booming semiconductor industry intend to expand their businesses this year. Similarly, pharmaceutical and cosmetics firms expressed optimism, with 39.6 percent and 39.4 percent, respectively, planning expansions.
"Despite expectations that exports and domestic consumption will recover simultaneously this year, businesses are set to maintain a prudent management stance due to uneven recovery across industries and a strong U.S. dollar," Kang Seok-koo, head of the research division at the KCCI, mentioned in a release.