Korea: Consumer confidence edges down in February

The composite consumer sentiment index compiled by the Bank of Korea declined for the third consecutive month in February, coming in at 108.2 points, down from the 109.9 points recorded in January. Nonetheless, consumer confidence remained above the 100-point threshold that separates optimism from pessimism among Korean households.

February’s reading reflected consumers’ less optimistic views regarding current and prospective domestic economic conditions, coupled with decreased optimism about their future income and spending levels compared to the previous month. Consumers’ appraisal of their current and future living standards remained stable from January.

The dip in consumer confidence in February came amid recent signs that the United States is pursuing a tough stance on trade with Korea and other countries. On 22 January, the United States announced import tariffs would be applied to washing machines and it is also engaged in numerous ongoing trade policy disputes with Korea. In addition, the two countries are in the early stages of negotiations to revise their bilateral free trade agreement.

Korea Private Consumption Forecast

FocusEconomics Consensus Forecast panelists expect private consumption to expand 2.6% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, the panel sees private consumption growth at 2.4%.