Consumer Sentiment In Korea Declines Sharply

Korean consumer sentiment declined sharply in September. Consumers' view of their present situation worsened by 4.6% from August and was 37.3% below September, 2002. The index at 59.9 was the lowest value since December 2000.. Consumer expectations of conditions six months hence, declined by 1.6% and was 13.5% below September, 2002.. As part of their overall appraisal of current and future conditions, consumers are asked to appraise business conditions as well as household conditions and expectations for consumption expenditures. In both cases, consumers' appraisal of the current business situation and expectations of future business conditions were largely responsible for the overall declines in sentiment.. Apprehension with regard to the business situation may have been heightened as a result of the current uncertain political climate. President Roh, who was elected last April has had to cope with an opposition dominated parliament, labor unrest, a series of scandals and declining approval ratings. He has recently called for a referendum on his leadership to take place on December 15. The constitutionality of such a move is in doubt, but whether or not the referendum takes place, the uncertainty is likely to continue to dampen consumer sentiment.