Consumer sentiment tumbles for 3rd month straight in October

The composite consumer sentiment index stood at 98.1 in October, down from 99.7 the previous month, marking the lowest since May this year, when the comparable figure was 98, according to the survey conducted by the Bank of Korea.

People shop for groceries at a supermarket in Seoul on Tuesday. [YONHAP]

Korea's consumer sentiment tumbled for the third straight month in October amid woes over an economic slowdown, slumping exports and weakened spending power, a central bank poll showed Wednesday.

The composite consumer sentiment index stood at 98.1 in October, down from 99.7 the previous month, marking the lowest since May this year, when the comparable figure was 98, according to the survey conducted by the Bank of Korea. (BOK).

A reading below 100 means pessimists outnumber optimists.

The central bank said consumer sentiment fell amid protracted tighter monetary tightening and higher inflation.

Inflation expectations edged up flat in October amid a downward trend in consumer prices, the survey showed.

This month, consumers expect prices to rise 3.4 percent for the year ahead, up from 3.3 percent a month earlier, marking the first rise in eight months amid increased geopolitical risks and a hike in public service fees.

The figures are closely watched, as their upward move could cause businesses to raise prices and people to ask for pay raises, resulting in more upward pressure on inflation.

Inflation is moderating, although its pace gathered ground last month due to higher oil prices.

Consumer prices increased 3.7 percent last month from a year earlier, the fastest in five months, driven by higher oil costs and rising prices of some farm goods.

The BOK has predicted inflationary pressure will build up down the road, with inflation expected to stay over 3 percent around the end of the year, far higher than its target rate of 2 percent.

Early this month, the bank held its key interest rate steady at 3.5 percent for the sixth straight time amid a slowdown in growth and heightened uncertainties, such as the prolonged Ukraine-Russia war and rising household debts.

This marked the sixth straight time that the BOK has stood pat following rate freezes in February, April, May, July and August. The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]