South Korean consumers’ confidence fell to a three-month low in December as nagging concerns about the eurozone debt crisis increased economic uncertainty, the central bank said Tuesday.
The consumer sentiment index ― a gauge of consumers’ overall economic outlook, living conditions and future spending ― came in at 99 for December, down from 103 tallied in the previous month, according to a survey by the Bank of Korea.
The December data marked the lowest level since the index reached an identical 99 in September, the bank said. The sentiment index, a gauge of future private spending, also fell below the benchmark 100 in three months.
A reading below the benchmark 100 means pessimists outnumber optimists. The survey, based on a poll of 2,200 households in 56 cities nationwide, was made from Dec. 14-21.
“Nagging concerns about Europe’s debt crisis and a series of credit rating downgrades for troubled nations in the eurozone weighed on consumer sentiment,” said Jang Wan-sub, an official at the BOK.
“Downward revisions about Korea’s economic growth for next year also affected sentiment.”
The data came as economic uncertainty has amplified, plagued by the ongoing eurozone debt crisis and a downbeat prospect for the global economy. The BOK said that the South Korean economy, Asia’s fourth-largest, is expected to slow to 3.7 percent next year, down from a 3.8 percent expansion estimated for this year.
The central bank said that consumer inflation is likely to grow 3.3 percent next year, easing from a projection of 4 percent growth for this year. But consumers’ inflation expectations still stayed at a high level in December, the data showed.
South Korean consumers in December forecast inflation would reach an annual average of 4 percent over the next 12 months, slightly down from 4.1 percent estimated in the previous month, according to the BOK. The central bank aims to keep annual consumer inflation between 2 percent and 4 percent from 2010 and 2012.
The sub-index measuring consumers’ economic growth outlook stood at 78 for this month, down from 86 tallied in November, indicating that the growth projection is getting darker amid the global slowdown.
The BOK froze the key interest rate at 3.25 percent for the sixth straight month in December as downside risks to growth increased due to Europe’s debt strains.
(Yonhap News)
