Korea: Consumer confidence falls sharply in July
July 25, 2018
The Bank of Korea’s composite consumer sentiment index decreased to 101 points in July from 105.5 in June, the lowest reading since April 2017. Nevertheless, in July, the index remained above the 100-point threshold that separates optimism from pessimism among Korean households.
The decrease in July was largely driven by worse sentiment regarding current and future domestic economic conditions. This may have been due to rising trade tensions between China and the U.S., two of Korea’s largest trading partners. Consumer sentiment regarding current and prospective living standards deteriorated in July, likely due to higher in unemployment in recent months. Consumer confidence over prospective household income and spending also both fell in July.
Korea Private Consumption Forecast
FocusEconomics Consensus Forecast panelists expect private consumption to expand 2.8% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, the panel sees private consumption growth at 2.5%.
Author: Edward Gardner, Economist