Korea: Consumer confidence records worst reading since January 2021 in June
Consumer confidence came in at 96.4 in June, down from May’s 102.6. June’s result marked the worst performance since January 2021. As a result, the index fell below the 100-threshold, indicating that consumers are now pessimistic.
The decline was due to a deterioration in consumers’ assessments of the current and future state of the Korean economy. Meanwhile, inflation expectations for the year ahead year rose from 3.4% to 3.9%.
ING’s Min Joo Kang commented on the implications of the print for economic activity in Q3:
“We expected the CSI to slip this month, but not to this extent. The decline in confidence now puts downside risk to our GDP forecasts (0.7% q/q sa in 3Q22). The KOSPI has tumbled by more than 9% month-to-date while the KRW has broken through the 1300 level. Also, mortgage/lending rates have risen further. All these factors are probably hurting consumer sentiment.”