Korea Business Sentiment Turns Optimistic

Korea’s business sentiment turned clearly optimistic from a slightly pessimistic reading a month earlier thanks to improving prospects for global growth and encouraging signs in the domestic market, according to the monthly Business Survey Index (BSI) conducted by the Federation of Korean Industries (FKI) released Sunday.

The BSI for the month of May rose to 104.7 from 98.4 for April.

A BSI reading above 100 indicates that optimists outnumber pessimists among the country’s 600 largest businesses in terms of sales volume.

The rising sentiment is attributed to the recent IMF forecast projecting global economic growth of 3.5% in 2012, a 0.2 percentage point upward revision from a forecast made in January.

That announcement was bolstered by a drop in consumer and producer price inflation to the 2% range as of March, augmented by solid advances in employment and industrial production.

“Such upbeat developments have offset persistent euro zone woes, high crude oil prices and a high level of household debt, and buoyed business sector sentiment,” said the FKI press release.

By business sectors the BSI exceeds 100 for the domestic market, business investments and exports while employment is at the neutral 100 mark.

The most optimistic sectors are manufacturing and services with BSI of 104.7 and 104.6, respectively.

The BSI reading for overall financial conditions remained a mildly pessimistic 98.2.