Nearly one million individuals and companies in Korea reported closing their businesses last year, with weak earnings being the most common reason for the shutdowns, data from the National Tax Service (NTS) showed, Monday.
Experts say the latest data reflects a deepening crisis for small business owners and self-employed people, exacerbated by the continued impact of high interest rates and weak domestic demand.
According to the NTS, the number of reported business shutdowns rose to 986,487 last year from 867,292 cases in 2022.
The latest data represents the highest number of business shutdowns recorded since the government began keeping track of such figures in 2006.
During the COVID-19 pandemic from 2020 to 2022, the number of business shutdowns remained at around 800,000, but surged dramatically last year.
Among the 986,487 reported shutdowns, 482,183 were due to sluggish business, the second-largest figure since the 2008 global financial crisis, and a marked increase from the 406,225 closures seen in 2022.
Another 451,203 businesses did not disclose specific reasons for their closure, while 40,369 cited business transfers and acquisitions.
By sector, retail businesses saw the highest number of closures at 276,535, followed by the service industry at 217,821, and restaurants at 158,279. Each of these industries is strongly influenced by domestic demand.
Due to the depressed real estate market last year, the rental and construction segments also suffered, with 94,330 and 48,608 businesses filing for closure, respectively.
Meanwhile, Statistics Korea data revealed that the number of former self-employed individuals who became jobless after shutting down their businesses rose by more than 20 percent over the past year.
The data shows that the monthly average number of unemployed people was 918,000 in the first half of this year, up 6.9 percent compared to the same period last year.
Among the unemployed, 26,000 individuals were former self-employed workers, marking a 23.1 percent increase from the previous year. 추천 This increase reflects their failure to be reemployed despite efforts to secure new jobs after closing their businesses.
The number of economically inactive former self-employed individuals has grown to an average of 268,000 per month, representing a 6 percent increase from the year before.
Economically inactive individuals are defined as those aged over 15 who are neither employed nor trying to find jobs.