By Park Hyong-ki
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The business sentiment index (BSI) fell 1 point to 74 for August. It has been falling since June this year when the index stood at 80. This followed a slight rebound in May at 81 from the month before.
Still, the sentiment has remained under the 100 threshold. A reading below 100 indicates businesses that are negative about their economic future outnumber those with a positive outlook.
The BSI has been dragged down by the weakening consumer sentiment, beset by recent poor employment data and rising inequality, analysts say.
The number of jobs created in July only stood at 5,000, which many say was a "shock," leading to a political infighting over the Moon Jae-in administration's flagship income-led growth policy.
The BOK earlier this week announced the consumer sentiment index stood at 99.2, down 1.8 points from the previous month, the lowest since March last year when it stood at 96.3.
The threshold for this index is the same as the BSI _ 100. Basically, a lower number than 100 means there are a lot more consumers with a bleak outlook than those with a positive one.
Analysts say the government will have to show initiative that can help rebuild confidence in the economy.
"It is speeding up decisions related to fiscal stimulus and measures to boost investment. The time is ripe for the central bank to play a supporting role for the economy," said Park Jeong-woo, an analyst at Korea Investment & Securities.
The business sentiment for September is expected to improve though as the government is pushing to lower consumption taxes, and the country puts the summer heat wave behind, according to the BOK.
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