Consumer sentiment plunges

By Nam Hyun-woo

Korea’s consumer sentiment in November plunged to its lowest level in seven years.

The drop came as the domestic economy remains frozen amid an unprecedented political scandal here and Donald Trump’s U.S. Presidential election win, a central bank survey showed Friday.

According to the Bank of Korea (BOK), the composite consumer sentiment index for November was 95.8, down 6.1 points from a month earlier. A reading below 100 means pessimists outnumber optimists.

The November figure is the lowest since April 2009, when the index was 94.2. In terms of a month-on-month decline, November’s drop is the sharpest since June 2015, when the index fell 6.7 points amid fears over Middle East Respiratory Syndrome.

“November’s consumer sentiment was highly affected by the U.S. Presidential election and domestic political circumstances,” a BOK official said.

The view is in line with Deputy Prime Minister Yoo Il-ho’s earlier remark that “the recent political situation in and outside the country could further contract consumer sentiment.”

After Trump’s upset win in the U.S. Presidential election, the global economy is facing increasing volatility. And the scandal that has made President Park Geun-hye the first Korean president to be identified as “a criminal suspect” by the prosecution is paralyzing politics and the economy.

In a breakdown, consumer sentiment for domestic economic conditions was 60, down 12 points from a month before, and that for the future outlook deteriorated 16 points to 64.

Consumer sentiment on living standards was 90, down two points from October, and that for the future dropped five points to 93.

The BOK said the monthly index was based on a survey of 2,056 households across the country from Nov. 11 to 18.