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Three Tax Deductions You Might Miss That Could Save You Money The income tax withheld from monthly salaries is reconciled during the year-end settlement, allowing taxpayers to receive refunds for overpayments or make additional payments for underpayments. Experts advise that managing tax deduction items now, rather than waiting until the year-end settlement season, can significantly increase refund amounts.The first item to check is the usage ratio of credit and debit cards. Only the amount spent that exceeds a certain percentage of total salary is eligible for deductions, and generally, the deduction rates for debit cards and cash receipts are higher than those for credit cards. This is why consumers adjust their spending plans as the year-end approaches.Contributions to retirement savings and Individual Retirement Pension (IRP) accounts are also key tax-saving tools. Tax credits are available for contributions up to a certain limit, making these popular options among employees. Planning contributions in advance rather than making a lump sum payment at year-end can help reduce financial burdens.Medical expenses, education costs, and donations are also eligible for deductions. Expenses incurred for dependents can also qualify for deductions, so it is advisable to check related receipts and documentation in advance.For dual-income couples, it is important to evaluate who should claim the dependent deduction. Since the same family cannot be claimed for deductions by both partners, considering income levels and deduction items can lead to differences in refund amounts.Housing-related deductions are often overlooked. Rent tax credits for non-homeowners and deductions for contributions to comprehensive housing subscription savings can provide tax benefits if eligibility criteria are met.Experts emphasize that the year-end settlement process is not just about submitting documents in January or February; it is influenced by year-round spending, financial product subscriptions, and management of deduction items. The more prepared individuals are, the higher the likelihood of increasing their refund amounts.* This article has been translated by AI. 2026-08-11 17:04:00
Construction Companies Face Mixed Results in Overseas Projects Domestic construction companies are experiencing mixed results in their overseas operations. While existing overseas projects supported performance in the first half of the year, the ability to secure large contracts for nuclear power, liquefied natural gas (LNG), and data centers in the second half is expected to determine results for next year.According to the Korea Construction Industry Institute on August 11, the total value of overseas construction orders for the year is projected to reach between $27.57 billion and $30.24 billion. Given that domestic construction companies secured $11.281 billion in overseas orders in the first half, they will need to secure an additional $16.29 billion to $18.96 billion in the second half, representing an increase of at least 44% compared to the first half.In the first half, Hyundai Engineering & Construction led with overseas orders totaling $3.514 billion, largely due to securing major projects like an electric steel mill in the United States. The company plans to expand its overseas operations in the second half by pursuing large nuclear power projects, small modular reactors (SMRs), solar energy, and data centers. The Kozloduy nuclear power plant in Bulgaria has already entered the design phase, and its transition to an EPC contract is seen as a pivotal moment for expanding large nuclear projects.Samsung C&T has seen significant revenue from existing overseas projects. While it has secured new contracts for a semiconductor plant in Xi'an, China, and a data center in Malaysia, revenue recognition from ongoing projects has contributed to its performance. The company cited the ramp-up of high-tech construction and favorable progress in overseas plant projects as key factors for its improved results. In the second half, it plans to expand new orders in Southeast Asia, including data centers, SMRs, and renewable energy projects.Daewoo Engineering & Construction's overseas order backlog could change significantly depending on the outcome of large LNG project contracts in the second half. With increased prospects for securing major projects like the Papua New Guinea LNG and Mozambique's Rovuma LNG, the company has raised its overall new order target for the year from 18 trillion won to 27 trillion won, a 50% increase.GS Engineering & Construction reported an overseas order backlog of 24.9 trillion won at the end of the first half, accounting for about 33% of its total backlog of 75.3954 trillion won, indicating a solid existing overseas pipeline. The contract amounts for projects like the Singapore rail and tunnel have increased, leading to a slight rise in backlog compared to the end of last year. However, new orders for plants and infrastructure have decreased by 80.9% and 56.2%, respectively, compared to the same period last year, leaving the pursuit of follow-up plant and infrastructure orders as a challenge for the second half.DL E&C has a relatively greater need to supplement its overseas workload. The company has extensive experience in EPC for various power plants both domestically and internationally and is currently engaged in a local project in the U.S. The synergy with DL Energy, which has experience in power project development, investment, and operation in the U.S., is also anticipated.The second half is expected to see a competitive race among construction companies for overseas orders in North America and the Pacific. In the first half, orders from the Middle East, a traditional overseas construction stronghold, plummeted to $1.272 billion, a 77.2% decrease compared to the same period last year. In contrast, the North America and Pacific region saw a 165% increase to $7.246 billion, accounting for 64.2% of total orders.A representative from one construction company noted, “By sector, industrial facilities (plants) accounted for $8.474 billion, or 75.1% of total orders,” adding, “There is a noticeable shift in the focus of overseas orders from oil and gas plants centered in the Middle East to manufacturing facilities, LNG, and nuclear power in North America.”* This article has been translated by AI. 2026-08-11 17:00:20
Ruling Party Task Force to Establish Evaluation System for Elected Officials The People Power Party's Task Force on Evaluation Innovation for Elected Officials has decided to conduct extensive field consultations and external research to establish a new evaluation system.During its second meeting held at the National Assembly on August 11, the task force agreed to gather a wide range of opinions from all elected officials affiliated with the party, including local and district heads, local council members, and senior former lawmakers. Additionally, the task force will work on developing a customized evaluation system that reflects the unique characteristics of each elected official through external research.The plan aims to derive a tailored evaluation system that comprehensively measures factors such as individual activity areas and contributions to party affairs, while scientifically addressing regional advantages and disadvantages. This approach seeks to continue the trend of data-driven quantitative assessments and region-specific adjustments established in previous evaluations of elected officials.The task force members particularly emphasized the importance of reflecting the opinions of the public and party members in the evaluation of elected officials, viewing this as a crucial step toward becoming a people-oriented party. Consequently, they agreed to explore practical and transparent methods to incorporate the voices of citizens and party members into the evaluation process.Jeong Hee-yong, the task force chair, stated, "Establishing a transparent system based on objective data and indicators is the starting point for evaluation innovation. We will complete a fair evaluation system that allows us to hear the voices of the public and party members, enabling the People Power Party to stand out as a competent party."On the same day, the task force also compared and reviewed the evaluation systems of its own party and other political parties. Jeong noted, "We have laid some groundwork in the past regarding evaluation systems, and this is a process of enhancing it by referencing examples from other parties. I will listen to various opinions."* This article has been translated by AI. 2026-08-11 17:00:00
Hanwha bids $1.2 billion for Austal USA to boost US shipbuilding SEOUL, August 11 (AJP) - Hanwha Group is seeking to acquire the U.S. operations of Australian shipbuilder and defense contractor Austal, stepping up efforts to expand its shipbuilding and defense presence in the United States. Hanwha has proposed acquiring 100 percent of the businesses and operating assets of Austal USA at an enterprise value of between $1.05 billion and $1.2 billion on a cash-free, debt-free basis. The move comes after Hanwha built a 19.9 percent stake in Austal Ltd., the Australian-listed parent company, and would give the Korean conglomerate direct control of another major U.S. shipbuilding base alongside its existing Philly Shipyard. According to industry sources Tuesday, Hanwha Defense USA submitted a nonbinding and conditional proposal to acquire Austal's U.S. operations. The proposal does not involve the acquisition of Austal as a whole. Its businesses in Australia, the Philippines and Vietnam would remain outside the transaction. The final purchase price would be determined following due diligence, negotiations on definitive agreements and regulatory reviews. Hanwha is expected to conduct due diligence for about four weeks. The proposal is subject to a series of U.S. regulatory approvals, including reviews by the Committee on Foreign Investment in the United States (CFIUS), the Defense Counterintelligence and Security Agency and antitrust clearance under the Hart-Scott-Rodino Act. Hanwha also plans to consult with key U.S. government customers, including the Department of Defense, Navy and Coast Guard, before submitting a more definitive proposal. If completed, the deal would give Hanwha two major U.S. shipbuilding hubs: Philly Shipyard on the East Coast and Austal USA's yard in Mobile, Alabama. Austal USA builds vessels for the Pentagon, U.S. Navy and Coast Guard and has produced Littoral Combat Ships, Expeditionary Fast Transport vessels, Coast Guard cutters and other auxiliary ships. It also participates in the production of modules for U.S. nuclear-powered submarines. The company would therefore provide Hanwha with a stronger foothold as it seeks to enter the U.S. Navy's newbuild and maintenance, repair and overhaul markets and expand cooperation between Austal USA and Philly Shipyard. Hanwha's pursuit of Austal dates back several years. In 2024, Hanwha initially sought to acquire Austal in its entirety but abandoned the plan amid regulatory hurdles involving national security reviews in the United States and Australia. It shifted its strategy in 2025 to gradually building a stake in the Australian parent company. Hanwha first acquired a 9.9 percent stake in Austal in 2025 and later received approval from the Australian government in December that year to raise its holding to 19.9 percent. The latest proposal marks a further refinement of that strategy, focusing specifically on Austal USA, a key production base for U.S. naval vessels, while excluding Austal's operations in Australia and other markets. "We have made a nonbinding preliminary proposal to acquire Austal's U.S. business," a Hanwha Defense USA official said. "Any transaction will be determined based on the results of due diligence." "Hanwha's top priority is to make a meaningful contribution to the revitalization of the U.S. shipbuilding industry," the official added. "We are exploring a range of opportunities to expand our business in the United States." AJP Takeaways △ Hanwha has offered up to $1.2 billion to acquire Austal USA. △ The deal would add a second major U.S. shipbuilding base alongside Philly Shipyard. △ Hanwha is targeting deeper access to U.S. Navy, Coast Guard and defense programs. 2026-08-11 16:59:43
MainBiz Calls for Tax Benefits for SMEs to Maintain Employment The Korea Management Innovation Small Business Association (MainBiz) has requested increased tax support for small and medium-sized enterprises (SMEs) to help maintain employment.On August 11, the SME Ombudsman held a regulatory improvement meeting with MainBiz at the Gwanghwamun Building in Jongno, Seoul. The meeting was attended by Choi Seung-jae, the SME Ombudsman, Kim Myung-jin, president of MainBiz, and other executives and representatives from member companies.Kwon Jong-soon, a director at MainBiz, stated, "If the benefits are insufficient, companies will ultimately choose to reduce their workforce when management becomes difficult." He proposed increasing the corporate and income tax deduction rates for SMEs that maintain employment to 20% and 30%, respectively, and extending the application period until the end of 2028.The government currently allows SMEs that adjust wages to maintain employment to deduct a portion of the reduced total wage and the increase in hourly wages from their corporate and income taxes. This program is set to end at the end of this year.Choi Seung-jae noted, "Given that the government recently announced the 2026 tax reform plan, which includes ending this program, it may not be easy to continue it. However, it is essential to first verify whether the program has achieved its original objectives." He suggested conducting a survey among MainBiz member companies to gather relevant data.MainBiz also requested an expansion of the support targets for regional SME development funds. Currently, local governments operate SME development funds to support startups, business stability, and region-specific industries, but the criteria for support and preference vary by municipality, leading to instances where MainBiz companies are excluded.The Ombudsman reported that he has conveyed requests for regulatory improvements to 15 metropolitan governments, including Seoul, and has received positive responses from Incheon and Gyeonggi. He stated that after the 2027 SME development fund operation plans are released by local governments, they will reassess whether management innovation-type SMEs are included in the support targets and whether the conditions for additional points and preferences are adequate.Choi emphasized, "Even if immediate answers to these issues are challenging, accumulating evidence from the field can reopen discussions. We will continue to collaborate with relevant departments to ensure that the suggestions made today lead to tangible improvements that SMEs can feel."* This article has been translated by AI. 2026-08-11 16:56:00
NCSOFT Reports Strong User Retention for Lineage Classic After 140 Days NCSOFT has expressed optimism about the long-term success of its game, Lineage Classic, as user metrics remain strong even after its launch.During a conference call on August 11, NCSOFT co-CEO Park Byung-moo stated, "The MMORPG market typically sees a surge in user acquisition initially, followed by a sharp decline. However, Lineage Classic has maintained a very solid monthly active user count (MAU) even 140 days post-launch."He added, "Conversations with the development and business teams indicate that we are actually at the beginning of Lineage Classic's life cycle. We expect it to follow a trajectory similar to Lineage M." 2026-08-11 16:56:00
Concerns Raised Over Reassessment of Historic Metal Typefaces by Cultural Heritage Agency The reassessment of the 'Jeongdogaja,' a metal typeface potentially predating the world's oldest known metal type, the Jikji, by 138 years, is set to be decided on August 13. However, it has come to light that some experts involved in the 2017 review of the Jeongdogaja's designation as a treasure are still part of the Cultural Heritage Committee's movable cultural heritage division. This raises questions about whether individuals who participated in the previous review should also be involved in the reassessment of the same artifact.Current regulations of the Cultural Heritage Committee stipulate that members or experts who have directly participated in a case should be excluded from investigation, review, and decision-making processes. Given that an audit revealed significant omissions and incorrect statistical applications during the 2017 review, the eligibility of those involved in that process must be scrutinized if the reassessment proceeds.The Jeongdogaja is believed to have been used to print the treasure No. 758, 'Nammyo Cheonhwa Sang Song Jeongdogaja,' created in 1239. If this claim is scientifically verified, it would predate the Jikji, printed in 1377, by 138 years. While the Jikji exists only in printed form, the Jeongdogaja is a physical metal type, which has garnered significant academic interest.The application for the Jeongdogaja's designation as a treasure was rejected during the 2017 Cultural Heritage Committee review. The reasons cited included doubts about its use as a printing type and insufficient verification of its provenance and ownership history.Audit Reveals Issues in 2017 Review ProcessThe controversy reignited last year when the results of an audit were made public during a national assembly inspection. It was revealed that key results from typesetting experiments were not properly communicated during the 2017 review, and there were issues with the statistical analysis.The designation investigation report at the time recorded that the sizes of the printed versions of 'Sok Myeong Yeok' and 'Seok Bo Sang Jeol' were reduced by 0.3 to 0.5 cm and 0.8 cm, respectively, compared to the original prints. However, the review secretary reported that there was no size difference for 'Sok Myeong Yeok,' and the 0.8 cm shrinkage noted in 'Seok Bo Sang Jeol' was not communicated to the committee members.Problems were also identified in the statistical analysis. If the advice from the National Statistical Office had been properly applied, the conclusion should have indicated that typesetting was possible, but the actual review concluded it was not feasible.This means that the decision on whether to designate the Jeongdogaja as a treasure was made without the committee members receiving objective data that could have influenced the outcome. Following the audit's findings, the Cultural Heritage Administration has indicated the need to reassess the authenticity of the Jeongdogaja and has been considering the possibility of a reassessment.Concerns Over Fairness in Reassessment ProcessThe key issue is who will conduct the investigation and make the judgment if a reassessment is decided. The movable cultural heritage division of the Cultural Heritage Committee, established in May, is responsible for artifacts like the Jeongdogaja.Among the experts in this division, two are known to have participated in the 2017 review of the Jeongdogaja. One has been appointed seven times consecutively and has served for over 14 years, while the other has been appointed six times consecutively for about 12 years.While long-term appointments do not violate current laws, the involvement of individuals who previously participated in the review of the same artifact raises concerns. Current presidential regulations state that members or experts who have directly engaged with a case should be excluded from investigation, review, and decision-making.Legally, the question arises whether the 2026 reassessment falls under the same 'case' as the 2017 review. If deemed the same case, those who were directly involved in the previous review would be subject to exclusion under the regulations.Even if the Cultural Heritage Administration views this process as a separate new case from the 2017 review, the same regulations allow parties to request the exclusion of specific members or experts if they believe a fair investigation and review cannot be expected.Potential Legal Implications from 2017 Review ErrorsThe issues identified in the 2017 review process extend beyond procedural fairness. Depending on how the documentation and reporting were conducted, there could be criminal implications.If the official responsible for the review had the authority to prepare official review materials or reports and knowingly recorded different information from the actual measurements, it could lead to charges of falsifying official documents.It is crucial to distinguish between simple errors in judgment and the act of misrepresenting objective facts. If the actual measurements indicated a shrinkage of 0.3 to 0.5 cm, but the official document stated 'no difference,' this is different from a mere difference of professional opinion.Conversely, the evaluation of statistical results regarding the feasibility of typesetting involves professional judgment. This aspect requires investigation into who applied which analytical methods and on what basis conclusions were altered.Abuse of authority is also a potential concern. If the review secretary used their official authority to direct or supervise in a way that led to a specific review conclusion, it could raise issues of abuse of power under criminal law.Thus, the focus of the investigation into the 2017 review should not only be on the miscommunication of data but also on who prepared or reported incorrect information, what directives were exchanged during the process, and whether other review participants were aware of these issues.Long-Term Committee Members Raise Questions About Reassessment IntegrityThe issue of long-term appointments is again coming under scrutiny in light of the reassessment. In 2019, the government amended the Cultural Heritage Committee regulations to limit the number of consecutive terms for members to two, aiming to enhance the fairness of committee operations.However, in 2023, the regulations were revised again, removing the limit on consecutive terms. While the two-term limit applied to 'members,' it did not extend to experts, meaning the long-term appointments of the current experts cannot be deemed a violation of regulations.The crux of the issue is not the number of terms served but whether it is appropriate for the same individuals who have long been involved in the investigation of a specific artifact to reassess that same artifact.While there is a need for experienced experts to maintain professionalism, having individuals who were directly involved in past reviews reassess the same issues presents a different challenge. This is why the government has established separate provisions for exclusion, avoidance, and recusal.Concerns About Trust in Cultural Heritage AdministrationThe recent reassignment of Hwang, the director of the Cultural Heritage Administration who served as the review secretary for the Jeongdogaja in 2017, has also drawn attention. Hwang was transferred to the Intangible Heritage Division in Jeonju in January and returned to the headquarters in Daejeon as the director of the Natural Heritage Division on August 7, just six days before the expected decision on the Jeongdogaja reassessment.While the Natural Heritage Division is not directly responsible for the movable cultural heritage division that reviews the Jeongdogaja, the Cultural Heritage Administration has stated that this personnel change is unrelated to the Jeongdogaja issue.Thus, the timing of the reassignment alone cannot definitively link it to the reassessment. What needs to be clarified is Hwang's actual role in this review process.It is essential to determine whether Hwang provided the 2017 review materials for this process, discussed the direction of the Jeongdogaja review with responsible officials, or consulted with committee members or experts on related matters. Given the audit's findings regarding the reporting process, the Cultural Heritage Administration must clarify Hwang's level of involvement in this reassessment.Trust in the Reassessment ProcessIf the Cultural Heritage Administration decides on the reassessment of the Jeongdogaja on August 13, the first step must be to clarify the composition of the review committee. It is crucial to identify which current members and experts participated in the 2017 review and what roles they played in that investigation and judgment.It must also be established whether these individuals will be excluded from the current investigation and review. If they determine that this is not the same case and therefore not subject to exclusion, they need to provide the rationale for that decision and whether there are any grounds for avoidance or recusal.Additionally, the roles of individuals from the Cultural Heritage Administration who were involved in the 2017 review, including Hwang, should be disclosed. If this reassessment is a process to reconsider issues stemming from the previous review, it is essential to distance those who contributed to the previous problems from the current judgment.Trust in the outcome will be difficult to achieve if those making the decisions are intertwined with the past review. This is especially true given the audit's findings that key data was omitted and statistical results were not accurately reflected during the 2017 review.As the Cultural Heritage Administration prepares for the reassessment, the first priority must be to clarify who will be involved in the review process.* This article has been translated by AI. 2026-08-11 16:52:10
Debate Erupts Over Tax Reforms for Non-Resident Homeowners Concerns and criticisms regarding the government's real estate tax reform plan were voiced during a full meeting of the National Assembly's Land, Infrastructure and Transport Committee. Lawmakers from both the ruling and opposition parties expressed worries that increased taxes on non-resident homeowners could harm genuine homebuyers and destabilize the rental market. On August 11, the committee meeting featured questions directed at Minister of Land, Infrastructure and Transport Kim Yun-deok and First Vice Minister Kim I-tak regarding the tax reform plan and the government's response to the housing market. The main issue was the proposed tax increase for non-resident homeowners. The government aims to strengthen tax burdens on these homeowners to establish a housing market order focused on actual residents. However, concerns were raised that even unavoidable circumstances such as work, education, health issues, or caring for parents could fall under this regulation. Democratic Party lawmaker Kang Deuk-gu stated, "There are opinions that we need to reconsider the sunset provision for non-resident homeowners who have become so due to unavoidable reasons like work or education. We need to carefully consider policies to prevent harm to these individuals." The potential instability in the rental market was also highlighted. Kang noted, "If we regulate non-resident homeowners, they will either have to live in the property or sell it. This could force tenants to vacate, raising concerns about rent increases." The opposition party strongly criticized the government's policies. People Power Party lawmaker Kang Dae-sik pointed out, "Looking at the cumulative change rate of housing sales in the metropolitan area during the first year of the current administration compared to the Roh Moo-hyun administration, the increase rate is the highest under this government." He added that rental prices in Seoul continue to rise to record levels. Kang also criticized the real estate policies of the Lee Jae-myung administration, stating, "If I were to give a grade, it would be an F. There is a saying that taxes encourage people to sell their homes while loans discourage them from buying." People Power Party lawmaker Kim Mi-ae raised concerns about the possibility of landlords passing on the tax burden to tenants. She remarked, "While the government aims for market stabilization and a focus on actual residents, landlords are likely to reflect the increased tax burden in rental prices or convert leases from jeonse to monthly rent." She emphasized, "Ultimately, the most vulnerable, the tenants, will bear the brunt of this. The impact on the rental market should have been thoroughly analyzed before announcing the tax reform plan." The issue of tax equity for couples owning a single home was also discussed. People Power Party lawmaker Kim Eun-hye questioned, "Couples living together in one home are now facing tax burdens similar to those of multiple homeowners. The president has encouraged marriage, but shouldn't this tax approach be improved?" Kim added, "Is it reasonable for one part of the government to promote marriage while another part encourages separation or divorce? We need to consider adjustments to the system." Minister Kim Yun-deok indicated that there is room for adjustments to minimize market shock. He stated, "It is important to work to reduce market shock through phased implementation and to continue monitoring public opinion." First Vice Minister Kim I-tak also responded, "Since we are in the legislative notice period, I believe adjustments can be made." Questions regarding supply policies also arose. Democratic Party lawmaker Kim Nam-kun criticized the supply policies of Seoul Mayor Oh Se-hoon, stating, "The current housing and rental crisis stems from the supply policies during Oh's four-year term." Kim pointed out, "While Mayor Oh denies a significant drop in housing supply, even based on permit standards, it is only 62% of the target. There is widespread criticism that the so-called rapid integrated planning is neither rapid nor integrated, merely a name."* This article has been translated by AI. 2026-08-11 16:52:10
Record Power Demand Amid Heat Wave Raises Pressure for Electricity Rate Hike As extreme heat drives total power demand to record levels, the financial burden related to power systems is expected to increase due to climate change. Analysts suggest that the 'climate adaptation costs' associated with investments in power grids and energy storage systems (ESS) may lead to pressure for higher electricity rates amid ongoing financial challenges for Korea Electric Power Corporation (KEPCO).According to the Korea Power Exchange, total demand, including both market and external demand, reached 104.4 gigawatts (GW) on August 7 at 3 p.m., surpassing the previous record of 104.2 GW set on August 25 last year. On the same day, market demand peaked at 95.3 GW, resulting in a supply reserve of 8.3 GW and a supply reserve ratio of 8.7%.Despite this surge in demand, the likelihood of immediate power supply issues remains low. The Korea Power Exchange forecasts this week's power demand to range between 92.9 and 96.7 GW, with reserves expected to be between 10.3 and 14.4 GW, indicating no anticipated disruptions in supply.However, the intensifying extreme weather events due to climate change are raising concerns. Heat waves increase cooling demand while reducing the cooling efficiency of power generation facilities, and droughts can further impact the availability of cooling water.The frequency and intensity of compound disasters, such as heavy rain and heat waves, are also on the rise. A study commissioned by Greenpeace and conducted by a research team led by Professor Kim Hyung-jun of KAIST analyzed summer weather patterns from 1991 to 2020 and the last four years (2021-2024). The median intensity index for compound disasters increased from 0.55 to 1.65, a threefold rise. The number of extreme compound disaster days, which fall within the top 1% historically, has increased from an average of 1.1 days to 5.2 days per year, a 4.8-fold increase.Professor Kim Hyung-jun stated, "Heat waves increase power demand while decreasing the cooling efficiency of power generation, and droughts affect the availability of cooling water. As climate change increases variability, it will also impact power supply stability."With the expansion of renewable energy, the importance of predicting weather variables is growing. Since solar and wind power generation varies with weather conditions, investments in power grids, ESS, and reserve resources are necessary to mitigate volatility. The Korea Power Exchange incorporates weather changes into hourly demand forecasts, but sudden changes, such as unexpected cloud cover, can lead to temporary forecasting errors.These 'climate adaptation costs' could further burden KEPCO's financial normalization efforts. Despite returning to profitability, KEPCO has struggled to improve its financial structure. As of the end of the first quarter, KEPCO's debt stood at 206 trillion won, with cumulative operating losses since 2021 reaching approximately 34 trillion won. According to financial information provider FnGuide, KEPCO's consensus operating profit for the second quarter, set to be announced on August 12, is projected to be 1.9642 trillion won, an 8% decrease from the same period last year. The company faces the challenge of addressing its accumulated financial burdens while simultaneously investing in new projects, such as expanding the power grid.Professor Park Jong-bae of Konkuk University’s Department of Electrical and Electronic Engineering noted, "If extreme heat becomes commonplace, power demand will increase, necessitating additional investments in power grids, generation facilities, and reserves. This implies higher investment and operational costs, which ultimately means consumers will bear the increased costs through higher electricity rates."* This article has been translated by AI. 2026-08-11 16:52:10
Heat Wave and Economic Pressures Continue to Burden Small Business Owners While exports and macroeconomic indicators have improved, small business owners continue to feel the strain of a challenging economy. Even with a recovery in consumer sentiment, high inflation, labor costs, and rent are preventing actual sales increases from translating into improved profitability. Experts predict that food prices will remain high in the second half of the year due to the impact of heat waves and extreme weather on agricultural production.According to the Small Business Market Promotion Agency, the Business Sentiment Index (BSI) for small businesses in June fell by 4.3 points to 63.6. A BSI above 100 indicates that many small business owners feel the economy is improving, while a score below 100 reflects a negative perception of economic conditions. Although macroeconomic recovery is underway, analysts suggest it will take considerable time for this trend to reach local markets and small businesses.Factors that could drive prices higher in the second half of the year include high exchange rates and extreme weather. If the won-dollar exchange rate remains elevated, the prices of imported food and raw materials are likely to rise. Sectors with a high proportion of raw materials, such as the restaurant and food industries, could see immediate cost increases due to rising exchange rates. Imported livestock products, including beef and pork, as well as coffee beans and various processed food ingredients, are particularly sensitive to exchange rate fluctuations.In 2022, the won-dollar exchange rate surged to around 1,400 won, contributing to rising prices for imported livestock and increasing cost pressures on the restaurant industry.Extreme weather also poses a risk. Both domestically and globally, heat waves, droughts, and heavy rainfall are affecting the production and supply of key agricultural products. Certain crops, such as coffee and cocoa, are particularly vulnerable to weather conditions, which can significantly impact yields. Staple crops like wheat and rice may also see price pressures if production declines.Higher temperatures can reduce livestock feed intake and growth rates, weaken immunity, and increase the likelihood of disease and mortality. A decline in productivity or a reduction in the number of animals raised can lead to decreased market supply, potentially driving up prices at the source.During the record heat wave in 2018, for instance, the price of broiler chickens at the source rose by 27% compared to the previous month due to increased mortality and growth delays, while pig mortality increased by 57.8% year-on-year. The price of eggs also rose by 115 won compared to the previous month due to a drop in laying rates. This indicates that heat waves can have far-reaching effects, impacting not only farm productivity but also grocery prices and cost burdens for restaurants.High interest rates are also a burden for small business owners. The Bank of Korea maintained its interest rate freeze in the first half of the year but raised the benchmark rate by 0.25 percentage points on July 16. There are concerns that further rate hikes may occur in the second half of the year, increasing financial costs for small business owners.Small businesses, which often rely heavily on loans, face significant changes in monthly financial costs based on interest rates. With already high fixed and variable costs for raw materials, labor, and rent, any increase in financial costs will reduce actual profits, even if sales remain stable. This is particularly critical for small businesses with volatile sales, as rising interest burdens could determine their ability to continue operations.Lee Eun-hee, an emeritus professor of consumer studies at Inha University, stated, "The price increases due to the heat wave are likely to extend beyond August, potentially affecting prices for two to three months or more. For small business owners who have relied on inexpensive imports, high exchange rates and poor local yields will be particularly damaging."* This article has been translated by AI. 2026-08-11 16:52:00