Bank of Korea says consumer sentiment falls as economic outlook darkens

The Bank of Korea said Tuesday that consumer sentiment in South Korea weakened in August as households grew more pessimistic about the economic outlook and their own financial situations. The composite consumer sentiment index fell 2.3 points to 104.5.

Assessments of current business conditions plunged five points to 79, driving the deterioration. Expectations for the economy six months ahead slipped three points to 89, while the outlook for job opportunities declined to 86. The central bank cited global uncertainties, including geopolitical tensions in the Middle East and fluctuations in artificial intelligence investment, as key factors clouding the domestic economic outlook.

Households also revised down their views on personal finances, with the index for current living conditions falling one point to 92 and the outlook for future income dropping to 100. Despite the gloomier mood, expectations for inflation remained anchored, with the median forecast for consumer price increases over the next year holding steady at 2.7 percent.

Price pressures remain a primary concern, though specific drivers are shifting. While petroleum products were cited most frequently as a factor likely to push prices higher at 50.2 percent, the share of respondents pointing to agricultural and livestock products rose 7.9 percentage points to 42.0 percent. Concerns about rent also increased, with the response rate for housing costs climbing 3.4 percentage points as these expenses weigh on household sentiment.

The survey covered 2,244 urban households nationwide between Aug. 7 and Aug. 14.