Fruits are displayed at a market in Seoul on Nov. 1, 2022. (Yonhap)
SEOUL, Nov. 3 (Korea Bizwire) — Concerns are growing that year-end consumption activities could drastically cool down if consumer sentiment is dampened due to the impact of the Halloween crowd crush in Seoul’s Itaewon district.
According to the Bank of Korea (BOK), South Korea’s consumer sentiment index (CSI) has remained below 100 for five straight months. The CSI stood at 96.4 in June, 86 in July, 88.8 in August, 91.4 in September and 88.8 in October.
If the CSI is lower than 100, it means consumer expectations for the economic situation are pessimistic compared to the average of the past (2003-2021).
Some economists warned that consumer sentiment, already fragile due to high inflation, could be dampened further due to the impact of the Itaewon tragedy.
The accident has created an atmosphere in which many could feel that holding year-end meetings or events would be insensitive.
South Korea’s economy witnessed a sharp slowdown in consumption in April, 2014, when the ferry Sewol sank in waters off the south coast and killed 304 people, mostly high school students.
According to BOK statistics, private consumption fell by 0.2 percent in the second quarter of 2014 on a quarter-to-quarter basis after rising by 0.5 percent in the first quarter.
In 2014, the central bank revised the nation’s annual growth forecast downward from 4 percent to 3.8 percent due to the impact of the Sewol ferry disaster. The actual growth rate, however, ended up being 3.2 percent.
J. S. Shin (js_shin@koreabizwire.com)
