Certified Public Accountants' Q1 Outlook, Economic Recovery 'Stagnant'... Will It Rebound?

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] Domestic certified public accountants (CPAs) evaluated that the economic improvement trend stalled in the first quarter of this year.

The "CPA Business Survey Index (CPA BSI)" for the first quarter of this year, released on the 30th by the Korean Institute of Certified Public Accountants (President Kim Young-sik), recorded 100. The BSI is based on a survey of CPAs (full-time accountants at accounting firms at the partner level or higher and inactive accountants at executive levels in companies), and a value above 100 indicates economic improvement, while below 100 indicates economic deterioration, with 100 as the baseline.

The survey result, being at the baseline of 100, indicates that the overall economy is similar to the previous quarter. The BSI had exceeded 100 for four consecutive quarters since the first quarter of last year, but in the first quarter of this year, it settled at the baseline. This suggests that the economic improvement trend has halted and the perceived economy has remained stagnant.

The outlook for the second quarter is 103, indicating expected economic improvement. However, it is forecasted that the degree of improvement will somewhat slow down, as this is a 15-point drop compared to the previous quarter.

The major detailed factors expected to affect South Korea's economy this year include the impact of COVID-19 (restructuring of the quarantine system and improvement in consumer sentiment (25%)), raw material prices and inflation (18%), global economic recovery trends (18%), the speed of normalization of monetary policy and changes in the funding environment (reduction of quantitative easing, interest rate hikes, and household loan regulations, etc., 14%), and domestic and international political issues (escalation of Russia-Ukraine tensions, domestic presidential and local elections, U.S. midterm elections, etc., 8%).

By industry, the BSI outlook for the second quarter exceeds 100 across all industries, indicating that the overall business conditions of major industries are expected to improve in the second quarter as well. However, except for electronics and construction, the BSI outlook for most industries in the second quarter has declined compared to the previous quarter, suggesting that the improvement trend will slow down. Among major industries, shipbuilding (143), information and communications (126), food and beverage (124), and electronics (123) showed bright business outlooks.

This content was produced with the assistance of AI translation services.