April 26, 2024

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Corporate loan growth in South Korea accelerated in the first quarter from three months earlier, central bank data showed on May 29, possibly indicating that companies may consider investment in the near future.

The outstanding loans extended to local companies came to 1,140.9 trillion won ($957 billion) as of end-March, up 19.6 trillion won from three months earlier, according to the data from the Bank of Korea.

This marks a 1.7 percent increase from the previous quarter when corporate loans grew 1.3 percent on-quarter. From the same period last year, it marks a 6.6 percent rise.

The BOK earlier said the local economy contracted 0.3 percent from three months earlier in the first quarter, partly blaming a delay in the execution of government and corporate spending that was planned and tallied in the January-March period.

By industrial sector, loans to manufacturing companies came to 351.2 trillion won as of end-March, up 6.5 trillion won from three months earlier, while those to companies in the service sector gained 9.9 trillion won to 686.9 trillion won, according to the data.

Borrowings by construction firms increased by 2.2 trillion won to 41.4 trillion won, marking a turnaround from a 1.9 trillion-won reduction in the previous quarter.

By Ram Garikipati and newswires (ram@heraldcorp.com)