Confidence falls in South Korea

25 February 2011

SEOUL: Consumer confidence levels are falling in South Korea, with rising prices and falling spending power among shoppers' primary concerns.

According to the regular index produced by the Bank of Korea, popular sentiment stood at 105 points in February 2011, measured against 108 points during January.

The current rating matched figures lodged in May 2009, and thus constituted the lowest total for 21 months.

"Global uncertainties, particularly those in the Middle East, have increased, which apparently affected consumer sentiment," the Bank of Korea's report argued.

Further contributors to the broader trend included worries about the national economy, and negative expectations regarding respondents' personal circumstances and potential spending power.

Inflation and surging house prices exerted a similarly pernicious effect on the overall perspective adopted by panellists, the Bank of Korea found.

More positively, the barometer surpassed the 100-point mark separating an optimistic from pessimistic assessment.

"Although the index is still above 100, it has reached its worst point over the recent two-year span," the Bank of Korea added.

When discussing inflation, interviewees predicted prices would jump 3.7% across the coming 12 months, approaching the high end of the official target, which stands in the 2% to 4% range.

Data sourced from Korea Times; additional content by Warc staff