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| A traditional market is seen nearly empty due to the spread of COVID-19 in Daejeon, March 19. Yonhap |
Key index plunge comparable to global financial crisis figures
By Lee Kyung-min
Korea's consumer confidence plummeted to the lowest level in a decade due to collapsing economic conditions amid the spread of the novel coronavirus, central bank data showed Friday.
According to the results of a survey released by the Bank of Korea (BOK), the composite consumer sentiment index (CCSI) for March came to 78.4, a drop of 18.5 points from a month earlier.
This is the lowest since March 2009, when the index stood at 72.8 and is the steepest month-on-month drop since July 2008, when the central bank began compiling related data.
The result came from the central bank's poll of 2,500 households across the nation conducted from March 10-17.
A reading below 100 means people with a pessimistic view outnumber those with an optimistic outlook.
The BOK said that consumers' confidence has been deteriorating fast due to heightened fears of further economic downturn fueled by the global COVID-19 pandemic.
The fresh shock is weighing heavily on the already shaky economy which is still reeling from the U.S.-China trade feud, with the country's exports and corporate investment continuing to fall steeply.
Korea's export-reliant economy, one of the hardest hit among its global peers, will see further deterioration in the coming months, according to Yonsei University economist Sung Tae-yoon.
"The drawn-out trade dispute between the world's two largest economies has yet to see any material improvements, and the new virus-triggered woes will significantly dent corporate performance," he said.
"Many people have already lost jobs and many more will too. Their lost or reduced paychecks mean people will not spend, putting the economy in worse shape than it already is. The April data will be far worse."
The gloomy assessment is in line with the central bank data whose sub-index showed a sharp fall in consumer sentiment on current living standards and future outlook as well as job prospects.
Consumer Sentiment Index (CSI) for current economic conditions was 38, a drop of a whopping 28 points from a month earlier. This was the lowest since March 2009 when it stood at 34.
The index for future economic conditions fell to 62, down 14 points, the lowest since December 2008 when it was 55.
Consumer sentiment on future household conditions and future household income fell 10 points to 83 and 87, respectively. The index for future job prospects dropped 17 points to 64. The three were the lowest since March 2009.
The index for future income prospects slid 7 points to 109.
Expectations for inflation in the coming 12 months was 1.7 percent, remaining unchanged from a month earlier.
Around 4 percent of the respondents said they expected prices to fall in the coming months, the highest figure since the central bank begain compiling related data.
