Business sentiment dropped to its lowest level in over two years amid lingering economic uncertainties and weak domestic demand.

According to the Bank of Korea on Wednesday, the business survey index(BSI) for all industries dropped by one point on-month to stand at 74 for December, marking the lowest in 26 months since October 2020 when it also posted 74.

With a reading below 100 indicating that pessimists outnumber optimists, sentiment continued to slide toward pessimism for the fourth straight month after rising to 80 in July and 81 in August.

The BSI for manufacturing dropped three points on-month to hit 71 in December, while the index for non-manufacturing such as restaurants, wholesalers and retail businesses marked 76, unchanged from the previous month.

Meanwhile, local firms' business outlook for January also slipped by four points on-month, coming in at 70.