Confidence among South Korean consumers over economic situations stayed low this month due to the ongoing restructuring in shipping and shipbuilding industries, central bank data showed on Tuesday.
The composite consumer sentiment index (CCSI) stood at 99 in June, unchanged from the previous month, according to the Bank of Korea (BOK). The reading below 100 means pessimists outnumbered optimists. The index rose from 100 in March to 101 in April, before falling to 99 in May and June. The result is based on a BOK survey of 2,079 households nationwide between June 14 and 21.
The low consumer confidence came as the government pushed for restructuring in troubled shipbuilders and shipping firms, which are expected to cause massive layoffs and reduction in facilities.
The British vote to leave the European Union (EU) increased volatility in the financial market, boosting uncertainties over future economic situations.
Sub-indices showed a dismal picture. The index on current economic situations fell 2 points from the previous month to 68 in June, with the reading for prospective economic situations sliding from 50 in May to 78 in June. Those were the lowest in four months.
As the BOK cut its benchmark interest rate by a quarter percentage point to 1.25 percent earlier this month, consumers predicted a further cut later this year. Inflation expectations, which reflect expectations among consumers for consumer price inflation in the next 12 months, came in at 2.4 percent in June, unchanged from the prior month.
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