The mood of South Korea's business sector ebbed slightly in February, but outlooks improved, reported the Bank of Korea on Friday. South Korea's composite business sentiment index for all industries in February logged at 85.3, down from 85.9 in January, striking the lowest level in four years. Readings above 100 on the index indicate optimism, whereas below suggest pessimism.
Despite this decline, the February composite index outlook for March rose to 88.0, up from 85.4 in the previous month. In the manufacturing sector, the sentiment index for February posted at 90.1, an increase from 89.0 in January, while the outlook index for March rose to 91.1 from 89.1. In the non-manufacturing sector, the sentiment index for February logged at 81.7, down from 83.6 in January, yet the outlook index rose to 85.8 from 82.6.
Additionally, South Korea's economic sentiment index, which combines business and consumer sentiments, rose to 90.2 in February, a significant increase from 86.7 in January. The central bank conducts a monthly survey of more than 3,500 private-sector enterprises, assessing various aspects like business conditions, sales, and profitability between February 6 and February 13.
The question of whether South Korea's business mood will improve in 2025 remains uncertain. In January, the Bank of Korea forecasted that the nation’s gross domestic product (GDP) would expand modestly by between 1.6% and 1.7% in 2025, a decrease from its previous forecast of 1.9% made in November and lower than the 2% GDP expansion recorded in 2024..