Business news for Mon, 24 Dec 2007 & with words economy+global. 4 news.

SOUTH Korea's consumer confidence declined from a five-year high, signaling spending may slow and crimp growth in Asia's fourth-largest economy. The sentiment index fell to 106 in the fourth quarter, the lowest in three quarters, from 112, the Bank of Korea said yesterday in a report in Seoul. A reading higher than 100 indicates optimists outnumber pessimists. The benchmark Kospi index of stocks has fallen eight percent from a November 1 record of 2,085.45 on concern US subprime-related losses would slow the global economy. Lehman Brothers Holdings Inc this month cut its 2008 growth forecast for South Korea to 4.6 percent from 4.7 percent, Bloomberg News reported. "Consumers were probably very worried by the US subprime crisis," said Lee Sung Kwon, an economist at Good Morning Shinhan Securities Co in Seoul. The yield on a five-year government bond rose two basis points to 5.87 percent in Seoul and the won gained 0.1 percent to 939.65 versus the dollar. The

JAPAN'S Cabinet approved a budget that includes increased spending on rural areas and social welfare, making it harder for Prime Minister Yasuo Fukuda to balance the books by 2011. Japan's deficit is set to widen for the first time in five years and spending will rise 0.2 percent to 83.1 trillion yen (US$732 billion) in the year starting on April 1, according to a budget proposal released in Tokyo, Bloomberg News reported. Fukuda may struggle to meet his deadline as cooling global growth dims the outlook for Japan's export-dependent economy. The ruling Liberal Democratic Party is under pressure to assist ailing regions and elderly voters after it lost control of the upper house in July, making it difficult for it to cut debt. "The current political situation is forcing Fukuda to spend more," said Hidenori Suezawa, chief strategist at Daiwa Securities SMBC Co in Tokyo. "Given that the nation's public debt is rising, the government needs to make drastic reforms in

A robust economy, an increasingly clear political landscape and promises of hefty state spending make Russian stocks an attractive bet, but any slowdown in the global economy could put a damper on that performance.

The international economy faces a year of living dangerously. When the world awakes on New Year’s Day, the hangover that many of us may be suffering will be a minor worry alongside the collective headache inflicted by the cocktail of threats menacing the global outlook.