Consumer confidence in South Korea deteriorated for the fifth consecutive month in April, or the longest period ever, as prospects for exports - the sole driver of the Korean economy - darkened from the ongoing trade frictions between the world’s two largest economies and strengthening in the Korean won.
According to data released by the Bank of Korea Wednesday, the country’s composite consumer sentiment index (CCSI) for April stood at 107.1, down 1 percentage point from the previous month.
A losing streak of five consecutive months is the first phenomenon since the record was kept from July 2008.
On Wednesday, the main composite Kospi closed down 0.62 percent at 2,448.81, and the won down 3.8 at 1,080.6 against the U.S. dollar.
The consumer sentiment index is at its lowest since 100.8 reading a year ago, but nevertheless above the 100 threshold that indicates more are positive than negative about the economy.
“Although sentiment has been deteriorating since it peaked in May following the launch of a new government, the pace is moderate,” said an official from the central bank.
But pundits say consumers have become disappointed by little signs of improvement in the economy and fretful of negative impact from sharp rise in minimum wage and shortened labor hours that hit hard on self-employed businesses and led to surge in joblessness.
The trade front also turned worrisome due to the trade war between the U.S. and China and a stronger won.
Sentiment could be lifted by the historic summit meetings between the two Koreas and North Korea and the U.S., but cannot last unless economic fundamentals improve, experts say.
Due to subdued demand, inflation sentiment also stayed stagnant. The sentiment index for inflation of the past year and the other reflecting inflation over the next year was unchanged at 2.5 percent and 2.6 percent, respectively.
By Kim In-oh and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]