Nearly six out of 10 South Korean companies expect overall economic conditions to deteriorate in the second half of this year mainly due to mounting eurozone woes and a slowdown in the Chinese economy, a poll showed Tuesday.

The survey on 500 local companies by the Korea Chamber of Commerce and Industry showed 59 percent of all respondents predicting worsening conditions ahead, with 96 percent claiming economic conditions are already bad.

The report by the country’s largest private economic organization with 135,000 members said only 19.4 percent of companies checked forecast improvements from July onwards, with 21.6 percent saying economic conditions will remain unchanged.

The KCCI also reported 56.3 percent of companies said South Korea’s domestic economy is in a state of gradual slowdown compared to 4.2 percent that said it is recovering. The remaining 39.5 percent said the downward spiral has been halted, although conditions remain stagnant.

“Troubles facing many European Union countries that show no signs of improving and the sluggish growth forecast for China are fueling concerns about the future,” the chamber of commerce said.

Of companies polled, 57.9 percent cited eurozone troubles as the single greatest economic threat.

It added companies were worried about falling domestic demand, inflationary pressure, a drop in exports and household debt issues.

They also said slowdown in growth could hurt sales and profitability.

The poll showed 27.4 percent of companies predicting the economy will bottom out in the fourth quarter of 2012, with 24.6 percent saying it will hit its lowest ebb in the third quarter, and 16.3 percent claiming conditions will rebound after dropping to their worst level in the second quarter.

The government said Asia’s fourth-largest economy will grow 3.7 percent this year, from a gain of 3.6 percent tallied in 2011. This forecast is not shared by the Bank of Korea, which said 3.5 percent growth is more likely for the year. 

(Yonhap News)