S. Korea's business confidence improves, but fears linger

SEOUL, Jan. 29 (Yonhap) -- South Korea's business sentiment for February
rebounded from an 11-year low on the government's stimulus package, but fears
remain as the economy is headed for its first recession in a decade, a survey
showed Thursday.
The monthly business survey index, an indicator of corporate sentiment for the
coming month, was 66 for February, compared with 52 the month before, according
to the poll by the Federation of Korean Industries.
It was the ninth straight month the index recorded a reading below 100, the
corporate lobby group said. A reading below 100 means the number of companies
expecting the economy will deteriorate outnumber those forecasting an
improvement.
"The February index slightly rose on expectations that the government's stimulus
packages may help the economy bottom out, but the real economy is rapidly falling
into a recession, driven by slumping exports," the federation said in a
statement.
The economy shrank 3.4 percent in the final quarter of 2008, marking the first
contraction on an annual basis in a decade.
While the government of President Lee Myung-bak still maintains a 3-percent
growth target for this year, economic data indicated the economy would fall into
a recession, or two consecutive quarters of contraction in gross domestic
product.
South Korea's economy grew 2.5 percent last year, compared with a 5.1 percent
expansion in 2007.
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