By Park Hyong-ki
Staff Reporter
Rising inflation and global credit crunch are undermining consumer spending in Korea.
According to the Organization for Economic Cooperation and Development (OECD), the country's consumer confidence index was 96.3 in May.
A figure below 100 shows that the number of economic pessimists outweigh optimists. The country's consumer index is the ninth lowest among 26 OECD member economies.
Consumer confidence measures future economy, living conditions and household spending six months down the road.
Of 26 economies, Australia had the lowest consumer sentiment with the confidence index hitting 90.9, followed by Spain with 91.5.
The United States, the world's biggest economy troubled by slow housing sales and subprime mortgage defaults, saw its confidence index plunge to 92.7, the third lowest level in OECD. Also, the figure is the worst in 28 years.
New Zealand, Greece, Portugal and Mexico were among OECD nations that had lower confidence levels than Korea. For instance, the consumer index in New Zealand was recorded at 93.9, and 94.1 in Greece.
However, the index dropped to 86.8 in June in Korea, the lowest since December 2004 when the index stood at 86.5.
The consumer assessment index, which compares consumer views of the economy and current living conditions to those held six months earlier, also fell to 61.3 from 72.2 a month ago.
Meanwhile, Korea's businesses seemed more optimistic about the economic outlook than consumers, with the business confidence index at 100.2 in May, the 12th lowest in the OECD.
New Zealand had the lowest corporate sentiment on its economy at 95.4, followed by Slovakia, Australia and Spain.
The U.S. business confidence level stood at 98.3, the fifth lowest.