Over One Million South Korean Businesses Close in 2024

(MENAFN) In a historic development, more than 1 million business owners in South Korea shut down operations in 2024, according to a news agency, which referenced official government statistics on Sunday.

This marks the first instance in the nation’s history that closures have reached such a high number.

The majority of these closures stemmed from the retail and dining sectors, which represented almost half of all businesses that ceased operations last year.

Data compiled by the National Tax Service revealed that a total of 1,008,282 enterprises—both individual and corporate—officially terminated their businesses in 2024.

This figure reflects a year-over-year increase of 21,795 closures.

This is the first occasion since data tracking began in 1995 that shutdowns have exceeded the one million threshold.

Business failures have been steadily rising since 2023.

Contributing factors include what experts describe as an "accumulated slump" caused by the COVID-19 crisis and increasing default rates linked to elevated interest levels.

The rate at which businesses closed also rose in 2024, climbing to 9.04 percent, slightly up from 9.02 percent in the prior year.

A decline in revenue was cited most frequently as the main driver for shutting down, representing nearly 50 percent of the total cases.

Economic analyst Kim Kwang-seok, who leads research at the Institute for Korean Economy, noted that persistently high interest rates and ongoing inflation have diminished real income.

This, in turn, has led to a drop in consumer spending across both retail and food service industries.

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