Koreans Now More Gloomy on Economy Than in Days of MERS, Sewol

  • Bank of Korea’s consumer confidence gauge at lowest since 2009
  • BOK says sense of uncertainty is fueling negative perceptions

Consumer confidence in South Korea has plunged to the lowest in more than seven years as a political scandal engulfing the president and some of the nation’s biggest companies casts clouds over the outlook for the economy.

The central bank’s monthly consumer sentiment index fell to 95.8 in November from 101.9 the previous month, indicating rising pessimism, data released Friday show. That puts the gauge below levels seen when a deadly respiratory disease kept local shoppers at home in 2015, and when a ferry sank in 2014, killing about 300 people, many of them school students.

“Domestic and external uncertainties have increased, causing more negative perceptions of the economy among consumers,” said Ju Soung-jeh, an economist at the central bank’s economics statistics department.

The index was determined by surveying 2,056 households from Nov. 11 to Nov. 18 on their views about subjects including income, spending and the economic outlook. A reading below 100 means there are more pessimistic responses than optimistic ones.

The political scandal looks set to disrupt economic policy making in South Korea as calls for President Park Geun-hye’s impeachment rise amid allegations that she colluded with former aides to put undue pressure on companies to raise funds for a foundation controlled by a friend. Park ousted her prime minister and finance minister and the process of approving replacements has been stalled for more than three weeks.

Korea’s financial market also remains jittery as investors seek cues for the policy direction of U.S. President-elect Donald Trump. The won depreciated 4.1 percent in the past month against the dollar, as the Kospi stock index fell 3.7 percent.

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