Jan. 27 (Bloomberg) -- South Korean manufacturers’ confidence is near a 30-month low as Europe’s debt crisis dims the outlook for exports.
An index measuring expectations for February was at 81 from January’s 79, the lowest level since July 2009, a statement from the Bank of Korea showed in Seoul today. A measure of expectations at non-manufacturing companies was unchanged at 79.
South Korea’s economy grew the least in two years in the fourth quarter as exports sank because of Europe’s crisis and a faltering global expansion, a government report showed yesterday. Gross domestic product is likely to shrink this quarter and the central bank may cut borrowing costs in April and July, Nomura Holdings Inc. says.
As “economic activity slows, we would expect inflation to ease and the Bank of Korea to start its easing cycle” in the second quarter, Frances Cheung, a Hong Kong-based strategist at Credit Agricole CIB said before today’s release.
The survey, conducted from Jan. 12 to 19, was based on responses from 1,623 manufacturers and 888 non-manufacturers.
Consumer confidence fell to the lowest in 10 months in January, the central bank said in a separate report. The sentiment index fell to 98, from 99 in December, the Bank of Korea said. A reading below 100 indicates pessimists outnumber optimists.
The gauge is based on survey responses from 2,032 households in 56 cities.
The South Korean economy, Asia’s fourth largest, expanded 0.4 percent from the third quarter, when it gained 0.8 percent, the central bank said in Seoul yesterday. That was less than the median 0.5 percent estimate of 10 economists surveyed by Bloomberg News. From a year earlier, growth was 3.4 percent.
--Editors: Paul Panckhurst, Brett Miller
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