MOSCOW, September 25 (RIA Novosti), Ekaterina Blinova - South Korean businesses feel pessimistic about the country’s growth prospects despite Seoul's efforts to boost the 'anemic' national economy.
The "Business survey index (BSI) for the fourth quarter, which gauges outlook for business conditions for the upcoming quarter, fell below the benchmark 100 for the first time in three quarters at 97, down 5 points from the previous quarter, according to a survey conducted by the Korea Institute for Industrial Economics and Trade (KIET) on 354 local firms between Sept. 3 and 23," Xinhua reports.
The media source points to the fact that the survey has indicated that all industries, excluding microelectronics and shipbuilding, had index figures below 100, "which means pessimists outnumbered optimists."
The other poll, a survey of 2,344 producers conducted by Korea Chamber of Commerce and Industry (KCCI), is revealing similar results: "the fourth-quarter BSI stood at 97, down 6 points from the prior quarter," emphasizes Xinhua, adding that indices continue to fall.
It is worth mentioning that a week ago, Seoul announced that it would increase next year’s spending in order to boost South Korea’s feeble economic growth, the Wall Street Journal noted.
"The government budget plan for 2015, [which was] reported by the finance ministry [at] the cabinet meeting, shows that total spending will grow by 5.7% to 376 trillion won ($363 billion), 20 trillion won more than this year's budget plan. It expects total income to increase by 3.6% to 382.7 trillion won next year," the media outlet underscored.
According to the government's plan, the fiscal deficit would be increased to 2.1 percent of GDP next year (from 1.7 percent of GDP in 2014), while overall sovereign debt would rise to 35.7 percent of GDP in 2015 (from 35.1 percent in 2014), the Wall Street Journal explained.
"We must take a proper response from the fiscal policy front to boost the economy," Bang Moon-kyu, a Vice Finance Minister, claimed as cited by Reuters on September 17.
Regardless of government-driven recovery efforts, South Korean businesses remain highly skeptical about the country’s prospects for improvement, citing slow global recovery, weak domestic demand and a slowdown in exports to China, "South Korea's No. 1 trading partner," stresses Xinhua. Germany’s IFO Business Climate Index declined to its lowest level since April 2013 this month. China’s economy also faces a slowdown, due to a lagging real estate sector.
