A poll released on Tuesday revealed that South Korea’s consumer sentiment had dropped to a 4-month low in September, as people felt the effects of a slowing economy, diminishing exports, and weakened purchasing power.
The composite consumer sentiment index was recorded at 99.7 for the month, down from 103.1 in August, the lowest since May when the figure was 98.
A reading below 100 means that pessimism is greater than optimism.
Expectations for inflation remained stable in September, in line with the downward trend in consumer prices, the survey showed.
Individuals predicted that consumer prices would rise 3.3 percent in the year ahead, the same as was estimated in the previous month.
These figures are closely monitored, as an increase could lead to businesses raising their prices and people asking for wage increases, thus pushing up inflation further.
South Korea’s consumer prices had risen 3.4 percent in August, higher than expected, due to increased prices of agricultural and manufactured goods. This was the highest yearly increase since April 2023’s 3.7 percent.
However, inflation is predicted to slow down in the future.
In August, the Bank of Korea (BOK) held its key interest rate steady for the fifth consecutive month at 3.5 percent, as it weighed the slowdown in growth against moderating inflation.
The BOK had previously frozen the rate in February, April, May and July after seven consecutive rate hikes from April 2022 to January 2023.
It is widely anticipated that the central bank will keep the rate the same at its next meeting.
In this file photo, a shopper browses products at a supermarket in Seoul on May 2, 2023. (Yonhap)
sam@yna.co.kr
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