South Korea: Business Confidence Plummets to Lowest Point Since Pandemic Amid Political Turmoil
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Seoul, Dec 27 (NationPress) The business sentiment index in South Korea has decreased to its most diminished level in over four years, driven by political instability after President Yoon Suk Yeol's fleeting declaration of martial law and apprehensions regarding the nation's growth prospects, as revealed by a central bank survey conducted on Friday.
The Composite Business Sentiment Index, or CBSI, for all sectors in December registered at 87, reflecting a decline of 4.5 points from the previous month's figure, according to data from the Bank of Korea.
This represents the lowest reading since September 2020 when the index stood at 83, as reported by the Yonhap news agency.
Furthermore, December's figure noted the most significant drop since January 2023, which saw a decrease of 5.6 points from the preceding month. The forecast for the following month diminished by 7.3 points to 82.4, marking the lowest point since August 2020.
The index serves as a gauge for corporate expectations regarding business conditions. A score falling below 100 indicates that pessimists surpass optimists.
The CBSI among manufacturers declined by 3.7 points from the prior month, settling at 86.9 in December, marking its lowest level since February 2023.
Manufacturers cited adverse business conditions and tight financial circumstances as primary contributors to their negative outlook.
The index for non-manufacturers also decreased by 5.0 points to 87.1, according to the data.
The economic sentiment index, which captures perceptions among both consumers and businesses, fell by 9.6 points to 83.1 for December, as per the data.
The deteriorating sentiment followed the opposition-led National Assembly's decision to impeach Yoon earlier this month, subsequent to his unexpected implementation of martial law on December 3.
The Constitutional Court has a period of up to 180 days to decide whether to remove Yoon from his position or to reinstate his authority.
Moreover, South Korea is facing declining domestic demand and sluggish export growth, with economic growth projections for next year anticipated to remain below the 2 percent mark.
