Korea's consumer and business sentiment sours to pandemic levels on runaway inflation
이 글자크기로 변경됩니다.
(예시) 가장 빠른 뉴스가 있고 다양한 정보, 쌍방향 소통이 숨쉬는 다음뉴스를 만나보세요. 다음뉴스는 국내외 주요이슈와 실시간 속보, 문화생활 및 다양한 분야의 뉴스를 입체적으로 전달하고 있습니다.
According to Consumer Survey for June released by the Bank of Korea (BOK) on Wednesday, consumers’ expected inflation – which measures prices in the following year - reached 3.9 percent, up 0.6 percentage point from 3.3 percent in May. The reading marks the highest since 3.9 percent in April 2012 in the steepest on-year gain since the central bank began compiling related data in 2008.
The survey was conducted on 2,500 households between June 13 and 20.
The strong prices – with the headline consumer price index gaining 5.4 percent in May and being warned to hit above 6 percent in following months – have affected the consumer sentiment for persistently high prices, the central bank observed.
Korea’s expected inflation rate topping 4 percent could be a harbinger for a crisis. It last exceeded 4 percent for a year from July 2008 before the Wall Street meltdown and again for a year from March 2011 in the wake of Japanese reactor crisis from monstrous earthquake and European fiscal woes.
What’s more worrisome is the pace of buildup due to galloping inflation and interest rate hikes in the U.S., the BOK added.
Consumers’ perceived inflation over the past one year reached 4.0 percent, up 0.6 percentage point from a year ago, and the strongest since 2013.
Expectations for higher interest rates also came to a record 149 in June, up 3 points against 146 in May. A reading above 100 means that more anticipate interest rates to go up higher from current levels in six-month time.
The BOK has accelerated rate increases in recent months to put the base rate at 1.75 percent in May – compared with 0.5 percent a year ago - and is expected to expand the hike scope to 50 basis points if the June inflation data exceeds 6 percent.
Expectations for housing price rise, on the other hand, fell 13 points from a month ago to 98, amid sluggish housing trade from rising interest rates.
All of the six major indicators that make up the CCSI sank from a month ago in June, with the index for prospective domestic economic conditions sliding 15 points to 69, current domestic economic conditions 14 points to 60, prospective living standards 5 points to 88, current living standards 2 points to 87, prospective household spending 2 points to 114, and prospective household income 1 point to 97.
Along with consumer sentiment, business confidence has soured, sliding to an 18-month low for July due to multiple challenges of high inflation, the unfavorable foreign exchange rate, and interest rate hikes, according to compiling by the Federation of Korean Industries (FKI) Wednesday.
A survey of top 600 Korean companies by revenue showed that the Business Survey Index (BSI) forecast for July reached 92.6, the lowest since 91.7 in January, 2021 and the fourth straight month to remain below 100.
A reading above 100 means there are more businesses that are optimistic about the economy than pessimistic and vice versa for below 100.
The readings for both manufacturing industry and non-manufacturing industries remained below 100 at 90.4 and 95.1, respectively. The BSI for the manufacturing industry continued to be below 100 for a fourth straight month. The non-mental materials and products sector registered 57.1 and textile and clothing 63.6. Electricity, gas, and water reading also reached 78.6 due to seasonal factors.
The only index that stayed above 100 for July was employment (103.9). The indices for inventory, investment, exports, financial condition, payability, and domestic demand were in negative territory, survey showed.
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
Copyright © 매일경제 & mk.co.kr. 무단 전재, 재배포 및 AI학습 이용 금지
- KCCI and SK chief meets business leaders in Japan on signs of thawing in bilateral relations - Pulse by Maeil Business News Kore
- Hanjin Transportation to invest $859 mn through 2025 to expand global logistics - Pulse by Maeil Business News Korea
- US will rely on partners-led sanctions on N.K. and Russia to contain aggression: Treasury Under Secretary - Pulse by Maeil Busin
- NHN Cloud aims to quadruple sales by 2026 with deeper penetration into public sector - Pulse by Maeil Business News Korea
- EV charging tariff to rise by 7% with sunset of special discount in Korea - Pulse by Maeil Business News Korea
- 강경준, 상간남 피소…사랑꾼 이미지 타격 [MK픽] - 스타투데이
- K방산 아킬레스건은 [K-방산 : New Dream]
- NCT 태일, 불미스러운 일로 팀 탈퇴…SM “엄중함 인지”[공식입장][전문] - MK스포츠
- 이찬원, 이태원 참사에 "노래 못해요" 했다가 봉변 당했다 - 스타투데이
- 양희은·양희경 자매, 오늘(4일) 모친상 - 스타투데이