Korea’s Consumer Sentiment Retreats Amid Worst Virus Wave
(Bloomberg) -- South Korean consumer confidence weakened sharply in December from a 10-month high as a resurgence of the coronavirus led to tighter restrictions on activity.
The Bank of Korea’s consumer sentiment index slid to 89.8 from 97.9 in November for its lowest reading in three months, the central bank said in a Tuesday statement. The biggest declines were seen in sub-indexes measuring the outlook for spending among households and their assessment of the economy.
Korea is going through its worst virus wave since the pandemic began, with daily cases surging to around 1,000 from below 100 at the start of November.
The jump in infections has led to speculation the government may enforce its strictest virus measures. Such a move would resemble a lockdown as non-essential facilities would be ordered to close.
The economy has suffered less than most major nations this year thanks to successful management of the first two virus waves and strong overseas demand for its tech products.
But the latest outbreak is dimming hopes of a fast recovery, with heightened caution among the public and business restrictions likely to keep the services sector depressed well into 2021.
While most components in the survey fell from the previous month, expectations for housing prices rose to the highest for data going back to 2013.
Surging property prices present a policy dilemma for the central bank as it tries to maintain accommodative policy while being more wary of risks from financial imbalances.
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