Credit card use at restaurants declines for first time in 7 years

South Korea’s credit card spending in restaurants fell 0.3 percent on-year in September 2018, marking the first on-year decline in nearly seven years, data from the Bank of Korea showed Wednesday.

The decline reflects a deterioration in consumer sentiment which plunged to a two-year low in August, a month before the latest drop observed in credit card spending. 

According to the nation’s central bank, the combined credit card spending for eating out here came to nearly 4.7 trillion won ($4 billion), which is the first time the BOK saw an on-year decline in the figure since February 2013. The on-year spending had declined a hefty 7 percent then.

In previous months, the spending rate had increased by 1.9 percent in July and 4.5 percent in August, but soon fell in the negative terrain.

Korea’s consumer sentiment, which is an indicator of how consumers feel about their financial health and the state of the economy, has been overall weak throughout the year.

After the composite consumer sentiment index hit a two-year low of 92.5 in August, it rebounded to 100.4 in December. A reading below the benchmark 100 means pessimists outnumber optimists.

“The consumer sentiment and the economic forecast for the food services industry are progressing on a similar level,” the Ministry of Agriculture, Food, and Rural Affairs said in its third-quarter report.

By Jung Min-kyung (mkjung@heraldcorp.com)