South Korea’s business sentiment for December hit its lowest level in nearly four years due to concerns over the persistent eurozone crisis, record high household debt and the U.S. fiscal cliff, a poll showed Wednesday.
The monthly business survey index for December fell to 82, the lowest level since March 2009 when it stood at 76.1, according to the survey of the country’s 600 largest businesses by sales by the Federation of Korean Industries, the lobby for the country’s large businesses.
The index has been below the breakeven 100 mark since June when it stood at 98.3. A BSI reading below the 100 mark means companies are pessimistic about their business outlook.
The FKI also said there are concerns that South Korea’s exports to China, the largest market for South Korean goods, could suffer a setback as the focus of the world’s second-largest economy shifts to domestic consumption from exports
It also said South Korea’s record high household debt is hurting private consumption. The outstanding amount of Korea’s household debt, including credit purchases, hit a record 937.5 trillion won ($864 billion) as of September, according to Bank of Korea.
Pessimists outnumbered optimists in all seven areas surveyed, including domestic demand, exports and investment. It marked the second time this year that the country’s major companies are pessimistic about their business outlook in all seven areas, according to the FKI.
By sector, the November BSI for the heavy industry stood at 74.3 while that for the light industry sector hit 95.3, according to the FKI. (Yonhap News)
