South Korea’s business sentiment for April fell from a month earlier due to unfavorable overseas trade conditions and concerns over high domestic household debt, a poll showed Thursday.
The monthly business survey index for the upcoming month came in at 98.4, down from 106.1 tallied for March, according to the Federation of Korean Industries, the lobbying group of the country’s large businesses.
A BSI reading below the break-even 100 mark means pessimists outnumber optimists. The poll surveyed the country’s 600 largest businesses in terms of sales.
The FKI attributed the drop to the recent announcement by Beijing that the world’s second largest economy will likely grow
7.5 percent this year, the lowest growth target set by China in eight years.
Business sentiment was also affected by persistent concerns in eurozone countries and the weak Japanese yen that can hurt the price competitiveness of South Korean products abroad, it added.
“Overall external conditions are not good with the situation exacerbated by high household debt that can hurt domestic consumption,” the federation said. South Korea’s household debt stood at 912.9 trillion won ($802.7 billion) in late 2011.
By sector, the latest BSI forecast sluggish market conditions for both manufacturing and service sectors, with numbers standing at 101.3 and 94.6, respectively, compared to 110.3 and 100.4 tallied this month.
The BSI readings for earnings, financial conditions and inventory all lost ground for April although numbers for investment and exports and hiring remained above the break-even 100 mark, the FKI said.
(Yonhap News)
