Korea: Consumer confidence remains in the doldrums in August
The Bank of Korea’s composite consumer sentiment index plunged to 92.5 in August from 95.9 in July, likely due in part to tensions with Japan. Accordingly, the index dropped to the lowest point since January 2017, and thereby moved further below the 100-point threshold that separates pessimism from optimism among households. Weak consumer confidence bodes poorly for private consumption in the third quarter.
The fall in consumer confidence in August was largely driven by households’ gloomier outlook on both current and future domestic economic conditions, while their assessment of the labor market was also more pessimistic. Moreover, consumers were more downbeat about their future household income and their ability to save.