South Korea Reports Over 1M Business Closures in 2024

(MENAFN) In a historic milestone, more than 1 million businesses in South Korea shuttered in 2024, marking the first time ever the nation has seen such a high number of closures, according to official data reported by media on Sunday.

The retail and restaurant sectors accounted for nearly half of all business closures last year, based on figures from the National Tax Service.

A total of 1,008,282 businesses, both individual and corporate, filed for closure in 2024, reflecting an increase of 21,795 closures compared to the previous year. This marks the first time since record-keeping began in 1995 that the total number of closures has crossed the 1 million mark.

Business closures have steadily risen since 2023, with analysts attributing the surge to the lingering effects of the COVID-19 pandemic and escalating delinquency rates driven by high interest rates.

The closure rate also saw a slight uptick, reaching 9.04% in 2024, up from 9.02% the year before.

The most commonly cited reason for the closures was a significant drop in sales, which accounted for nearly half of the total. Kim Kwang-seok, head of economic research at the Institute for Korean Economy, explained that sustained high interest rates and inflation have eroded real income, leading to reduced consumer spending in both the retail and restaurant industries.

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