Korea Business Confidence July 2017

Korea

Korea: Business confidence deteriorates in July

June 29, 2017

The Bank of Korea’s forward-looking business confidence indicator (BSI) for the manufacturing sector eased from 84 points in June to 80 points in July, marking the lowest reading since February. As a result, the indicator is now further below the 100-point threshold and signals pessimism among the majority of Korean businesses.

Looking at the results in detail, business sentiment among both export- and domestic-oriented firms deteriorated markedly in July. The former reflected a declining value of oil-related exports, while the latter stemmed from ongoing doubts regarding households’ massive debt burden. Business’ view on sales and profitability took a hit in July, while a small improvement in companies’ assessment of raw material prices did little to offset the overall decline.

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 4.0% in 2017, which is up 0.4 percentage points from last month’s forecast. In 2018, the panel expects growth in fixed investment to increase 2.3%.


Author:, Economist

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Korea Business Confidence July 2017

Note: Business Survey Index (BSI). An index value above 100 indicates an optimistic outlook while a value below 100 indicates a pessimistic outlook.
Source: Bank of Korea


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