Business confidence in South Korea improves

Business confidence among South Korean manufacturers improved last month due to a steady growth in exports, which account for around half of the economy, central bank data showed Thursday.

The May reading of business survey index (BSI) for big manufacturers rose 1 point from a month earlier to 80, according to the Bank of Korea (BOK). The figure was up 10 points from four months before.

"Business confidence does not stay at a high level, but it continued to rise due to steady growth in exports," said an official at the BOK. "Policy rate cut and fiscal stimulus also contributed to confidence improvement."

The country's exports rose 3.8 percent in April from a year earlier after growing 1.1 percent in the prior month. The current account balance kept its surplus trend for 15 straight months last month due to steady export growth.

The central bank cut its benchmark interest rate by 25 basis points to 2.5 percent at the May rate-setting meeting, while the finance ministry unveiled the extra budget plan worth 17.3 trillion won ($15 billion) in mid-April.

The BSI for June, a gauge of business environment outlook for the upcoming month, increased 1 point from a month earlier to 82, reflecting upbeat outlook for the economy among manufacturers.

Meanwhile, business confidence among non-manufacturers declined 1 point from a month earlier to 67 in May, while the figure for the upcoming month slid 3 points to 69.

Non-manufacturers picked weak domestic demand and economic uncertainties as major difficulties in doing their business.

The BSI was based on survey responses from 1,425 manufacturers and 1,008 non-manufacturers conducted by the BOK between May 15 and 23.