The rebound boded well for Asia's fourth-largest economy, but the index stayed below a point separating improvement from deterioration for a third consecutive quarter, the Korea Chamber of Commerce and Industry data showed.

The manufacturers' business sentiment index rebounded to 99 for the April-June period from 77 for the first quarter. This marked the first rise since the second quarter of 2010 and the highest level since the third quarter of 2011.

Still, the latest reading came below 100 because companies expecting deterioration in their business activity for the coming quarter outnumbered those predicting improvement.

The country's largest business lobby group said in the statement unstable political conditions in the Middle East and high global crude oil prices were cited by companies as the biggest risks to economic recovery.

The group, which represents more small to medium-sized companies than large conglomerates, said it had surveyed 2,500 manufacturers across the country from February 23 to March 8.

(Reporting By Se Young Lee; Editing by Choonsik Yoo)

• A Permanent Economic Emergency