Korea Business Confidence December 2016

Korea

Korea: Business confidence edges down in January

December 30, 2016

After two consecutive months of stable mood, pessimism among Korean consumers grew in January. The Bank of Korea’s forward-looking business confidence indicator (BSI) for the manufacturing sector inched down from 72 points in December to 71 points. The indicator remains firmly entrenched below the 100-point threshold, signaling that businesses are more pessimistic than optimistic.

Looking at the details, the sub-indicator of business sentiment among domestic-oriented firms declined considerably from the previous month, with respondents attributing their negative sentiment primarily to their serious concerns regarding the current social turmoil and political conflicts. Conversely, exporting businesses indicated more optimism, given the improvement seen recently in international trade and also due to higher Chinese demand for semiconductors.

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 3.5% in 2017, which is unchanged from last month’s forecast. In 2018, the panel expects growth in fixed investment to reach 2.5%.


Author:, Senior Economist

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Korea Business Confidence January 2016 1

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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