SEoul, South Korea – South Korea’s consumer sentiment has plummeted to its lowest level in over two years, as growing concerns over political uncertainty following the impeachment of President Yoon Suk Yeol have taken a toll on the economy. The Composite Consumer Sentiment Index fell to 88.4 in December, the lowest since November 2022, when a crowd crush on Halloween claimed the lives of 159 people.
The sharp decline in consumer confidence comes as thousands of protesters took to the streets of Seoul earlier this month following the passing of an impeachment motion against President Yoon, who had previously declared martial law. The decision is pending a formal vote by constitutional justices.
The contraction in consumer spending is particularly pronounced, with a sub-index on consumer spending outlook dropping 7 points. This is attributed to a decline in travel spending, dining out expenses, and durable goods, by 8 points, 6 points, and 3 points, respectively.
The Bank of Korea (BOK) has warned that the political turmoil is weighing heavily on the South Korean economy, and has called for increased fiscal support and other measures to ensure economic growth remains intact. According to BOK Governor Rhee Chang-yong, the country’s economy is under strain, and government intervention is necessary to mitigate the impact.
The news comes as the South Korean won hit a 15-year low, and the benchmark Kospi plunged in the days following the martial law declaration. The ongoing crisis has left many consumers worried about the future, and the continued uncertainty may only exacerbate the downward trend.