Accounting Policy Research Institute Releases 3Q CPA BSI: "Economic Expansion to Continue"

Economic Expansion Expected to Continue in Q4

Accountants have forecast that the economic expansion will continue into the third and fourth quarters of this year.

On October 7, the Accounting Policy Research Institute of the Korean Institute of Certified Public Accountants announced that the 'Business Survey Index as seen by Certified Public Accountants (CPA BSI)' for the third quarter of this year recorded 113.

The CPA BSI is calculated based on a survey of certified public accountants (including full-time partners at accounting firms and executive-level inactive accountants at corporations), who have expertise and experience in the overall economy and industry. A figure above 100 indicates economic improvement, while a figure below 100 points to economic deterioration.

The current BSI for the third quarter came in at 113, remaining above the baseline (100) and thus maintaining the pace of economic expansion, while showing strong downward rigidity by dropping only 2 points from the previous quarter despite adverse factors. This is attributed to semiconductor-driven exports, production, and investment supporting the real economy, despite external challenges such as geopolitical instability, inflation, and tariffs. Key indicators such as July's facility investment, which rose by 7.5% month-on-month, and the coincident index cyclical component, which increased by 0.8 points, showed consistent improvement.

The forecast BSI for the fourth quarter of this year was also tallied at 113, suggesting that the current momentum of economic expansion is expected to continue in the fourth quarter. Optimism regarding steady growth in exports, underpinned by expectations for robust global IT demand at year-end and continued technological competitiveness, had a positive influence. Nevertheless, concerns are mounting over higher financial costs due to exchange rate volatility and uncertainty in global monetary policy, lending support to a cautiously optimistic rather than an excessively exuberant outlook.

Key factors expected to affect Korea's economy over the next year included: ▲Global economic trends (31%), ▲Government policy changes (15%), ▲Raw material prices and inflation (13%), and ▲Geopolitical conflicts (12%).

The industry-by-industry current BSI results were: electronics (155), shipbuilding (139), information and communications (121), food and beverages (114), and machinery (114). Most industries, excluding long-struggling sectors such as petrochemicals and construction, were rated positively.

Likewise, in industry-by-industry outlooks, the BSI recorded 149 for electronics, 132 for shipbuilding, and 127 for information and communications. Most industries, except for construction and petrochemicals, are expected to experience improving business sentiment.

Meanwhile, the latest issue includes one special contribution on the economic outlook and four expert columns on major issues shaping future industries. Byunghwan Kim, Invited Research Fellow (former 10th Chairman of the Financial Services Commission), in his special contribution “A Historical Review and Implications of Financial Bubbles,” analyzed cases of past major financial bubbles and suggested directions for how the current market and financial regulators should respond to the ongoing debate over a possible AI bubble. The 28th edition of CPA BSI will be posted on the Accounting Policy Research Institute website on October 12.

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