Eight out of 10 smaller firms, domestic demand in doldrums

Eight out of 10 South Korean small and medium enterprises (SMEs) said domestic demand is mired in a slump amid a global economic crisis, a poll showed Tuesday. The Korea Federation of Small and Medium Business' survey on 425 businesses showed 85.6 percent said domestic demand is in the doldrums and 82.8 percent said the global economy faces a crisis. The survey also showed that 52.5 percent of the respondents said their companies' overall situations are as bad as they were during the 2008 global financial crisis, and that 42.6 percent said their sales have dropped. The survey, which was conducted between Feb. 22 and Feb. 28, found that 49.4 percent said the economy could improve while 40.7 percent said the economic situation will get worse before getting better. SMEs account for 99 percent of all enterprises and 88 percent of all employees in Asia's fourth-largest economy, where family-controlled conglomerates, known as chaebol, dominate net profits and market capitalization. Hit by the eurozone debt crisis and other external uncertainties, the South Korean economy has been mired in a slump. The country's gross domestic product grew 2 percent on-year in 2012, the slowest gain in three years.