S. Korea's business confidence worsens to 7-year low

Confidence among South Korean businesses over economic conditions worsened to the lowest in almost seven years in February due to global economic slump and rising geopolitical risks, central bank data showed Monday.

Business sentiment index (BSI) among manufacturers declined 2 points from the previous month to 63 in February, posting the lowest since March 2009, according to the Bank of Korea (BOK). The downward trend was kept for four straight months.

The reading below 100 means pessimists outnumbered optimists. The figure was based on a survey of 1,748 manufacturers and 1,121 non-manufacturers conducted between Feb. 15 and 22.

The downward trend came amid growing uncertainties facing the South Korean economy such as the global economic slowdown, especially in emerging economies, and consequent export slump in South Korea.

Exports, which account for about half of South Korea's economy, posted the biggest monthly decline in more than six years, and the February exports are estimated to have posted a double-digit reduction.

Business confidence was also rattled by rising geopolitical risks on the Koran peninsula after the Democratic People's Republic of Korea (DPRK)'s recent rocket launch and nuclear test.

Manufacturers picked weak domestic demand, uncertain economic conditions, stiffer competition and export slump as difficulties in doing businesses.

The BSI for non-manufacturers stood at 64 in February, down 4 points from the previous month. It marked the lowest in nearly seven years.

Non-manufacturers selected fragile domestic demand, economic uncertainties, fiercer competition and fund shortage as their main hardships. Endit