Kim Yeon-joo and Lee Ha-yeon
Consumer sentiment in Korea worsened to a level last seen when the society faced political uncertainties and divided following unprecedented presidential impeachment in early 2017 due to fears about a receding economy in the face of multiple trade challenges.
The composite consumer sentiment index (CCSI) for August retreated 3.4 points to 92.5, according to data released by the Bank of Korea on Tuesday. The index declined for four consecutive months to touch the lowest level since 92. 4 in January 2017 ahead of the Constitutional Court review on the legality of the legislative impeachment on a sitting president.
A reading above 100 means there are more optimists than pessimists about the economy and vice versa for below 100.
Consumer sentiment deteriorated amid foggy prospects about the Korean economy for this year and the next due to trade woes. The trade war between the two largest economies U.S. and China resumed after a truce while Korea entered its own trade battle with Japan as past issues spilled over to economic and security front. Korean stocks and currency value hit three year lows.
All six major indicators that make up the consumer index contracted from a month ago, data showed.
The index measuring expectations for future household livelihood fell 3 points to 89, the lowest since March 2009. That for future household income also was down 2 points to 94, the worst since April 2009.
Consumer view on current household livelihood sank 1 point to 90, and their expectations for future spending also down 2 points to 105.
Readings for consumer sentiment about current and future economic conditions shriveled 4 points each to 63 and 66, respectively.
Expectations for job opportunities worsened with the related index falling 3 points to 74.
The outlook for interest rate dipped 9 points to 85 on higher expectations for further rate cuts in both Korea and the U.S.
Meanwhile, expectations for future housing prices gained 1 point to 107, the highest since October last year.