South Korean manufacturers’ confidence rose to the highest level in six months on signs that the outlook for global growth is improving.
An index measuring expectations for April climbed to 85 from 84 for March, the Bank of Korea said in a statement in Seoul today. A measure of expectations at non-manufacturing companies advanced to 82 from 80.
Progress in containing Europe’s debt crisis has buoyed confidence, along with improvements in the U.S. economy and Federal Reserve Chairman Ben S. Bernanke signaling that an accommodative monetary policy may continue. South Korea’s consumer sentiment index rose to a four-month high, a central bank report showed yesterday.
“Broad sentiment and economic conditions are apparently improving, which will likely reduce any odds of an interest rate cut and buoy the won,” said Lee Sang Jae, a senior economist at Hyundai Securities Co. in Seoul. “The first quarter of this year will be a bottom and the economy will likely gain pace from the second quarter, with the European crisis easing and major economies picking up.”
The Bank of Korea left its benchmark rate unchanged at 3.25 percent on March 8 for a ninth straight month, saying that downside risks to growth persist while inflation expectations remain high. Consumer inflation moderated to a 14-month low of 3.1 percent in February, within the central bank’s target range.
The International Monetary Fund predicts “modest growth in the U.S., mild recession in Europe and a continuation of a comfortable level of growth in Asia with a soft landing in China,” David Lipton, first deputy managing director, said in Seoul yesterday.
The business survey, conducted from March 14 to March 21, was based on responses from 1,614 manufacturers and 882 non- manufacturers.
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