S.Korea Nov business sentiment index at near 6-year high as outlook improves

S.Korea Nov business sentiment index at near 6-year high as outlook improves

By REUTERS, Oct. 31, 2017

South Korea's November business sentiment index jumped to a near six-year high, a central bank survey showed on Tuesday, as the country's improved economic outlook and strong exports raised overall confidence.

The Bank of Korea's manufacturing business survey index (BSI) for November stood at 87 on a seasonally adjusted basis, the highest since December 2011, up from 79 in October.

But the reading remained well below 100, meaning that there were more panelists who were pessimistic about future business conditions than those who were optimistic.

The BOK's survey came after it upgraded its economic outlook to 3 percent from 2.8 percent at its October policy review in the wake of strong exports, raising the chances of a rate hike in the coming months.

Economic growth at home actually clocked its fastest pace in seven years last quarter, as global demand for the country's electronics more than offset the impact of trade tensions with China and boosted expectations for an imminent interest rate rise.

Confidence among exporting firms rose to 92 from 89 in October as a surge in South Korea's exports continued. September exports posted a ninth consecutive month of double-digit growth on higher memory chip and steel product sales.

Analysts expected another month of double-digit expansion in October exports on brisk IT sector sales.

The sub-index for the consumer firms also jumped to 80 from 73 a month earlier as an extension of a currency swap deal between China and South Korea was taken as signs of improvement in the two countries' relationship.

South Korea's central bank previously said the economic setback from retaliatory measures taken by China against the deployment of a U.S. anti-missile system in the country is expected to subside from the second quarter of next year.

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