South Korea’s business sentiment for July fell sharply from a month earlier due to persistent eurozone concerns and a slowdown in global economic growth, a poll showed Tuesday.

The monthly business survey index for the upcoming month came in at 89.7, down from 98.3 tallied for June, according to the poll by the Federation of Korean Industries, the lobbying group of the country’s large businesses.

The drop also marks the lowest BSI reading this year since 91 tallied for February.

A BSI reading below the break-even 100 mark means pessimists outnumber optimists. The poll surveyed the country’s 600 largest businesses by sales.

The FKI attributed the decline to mounting European woes centered around challenges facing Spain and Greece. It added that general global economic sluggishness has affected South Korea’s trade, causing the BSI to fall.

On the local front, the survey showed household debt and the weak property market is exerting negative influence on private consumption and business confidence.

By sector, the latest report showed BSI numbers exceeding the 100 mark only for employment and inventory. Numbers for the domestic economy and exports stood at 97.6 and 97.9, while overall financial conditions, which reflect the availability of funds, stood at 93.3, with profitability reaching 93.4.

BSI figures for the manufacturing and the service sector for July reached 88 and 92 each, according to the poll.

The slumping business confidence comes as Asia’s fourth-largest economy is showing signs of losing steam.

The Bank of Korea said the Korean economy will grow 3.5 percent this year down from an earlier estimate of 3.7 percent. The Washington-based International Monetary Fund estimated the country’s growth to slow down to 3.25 percent this year. Both numbers are lower than the 3.6 percent growth reached in 2011. 

(Yonhap News)