South Korea’s consumer confidence slumps due to rising food cost

Food price worries: Consumer confidence in South Korea experienced a decline in March, primarily due to concerns surrounding escalating food prices, as indicated by a survey conducted by the central bank.

This decline, the steepest since October, was reflected in the Consumer Sentiment Index, which dropped from 101.9 in February to 100.7.

Anticipated price increase

The survey revealed a shift in consumers’ expectations regarding inflation over the next year, with a rise from 3.0 per cent to 3.2 per cent, marking the first increase in five months. Notably, 63.4 per cent of respondents attributed this anticipated inflation to higher agricultural prices, a significant jump from the previous month’s 51.5 per cent.

South Korea witnessed a surge in consumer inflation in February following three consecutive months of moderation, largely driven by supply-side pressures stemming from increased agricultural prices. These developments come just ahead of the country’s legislative election.

(With Reuters Inputs)