Consumer outlook remains grim

Consumer sentiment fell to a three-month low in December as nagging concerns about the euro zone debt crisis increased economic uncertainty, the central bank said yesterday.

The consumer sentiment index - a gauge of consumers’ overall economic outlook, living conditions and future spending - came in at 99 for December, down from 103 tallied in the previous month, according to a survey by the Bank of Korea.

The December data marked the lowest level since the index reached an identical 99 in September, the bank said. A reading below the benchmark 100 means pessimists outnumber optimists. The survey, based on a poll of 2,200 households in 56 cities nationwide, was carried out from Dec. 14-21.

“Nagging concerns about Europe’s debt crisis and a series of credit rating downgrades for troubled nations in the euro zone weighed on consumer sentiment,” said Jang Wan-sub, an official at the BOK.

“Downward revisions of Korea’s economic growth for next year also affected sentiment.”

The data came as economic uncertainty has amplified, plagued by the downturn in Europe and grim prospects for the global economy.

The BOK said that the Korean economy, Asia’s fourth largest, is expected to slow to 3.7 percent next year, down from a 3.8 percent expansion estimated for this year.

The central bank said that consumer inflation is likely to grow 3.3 percent next year, easing from a projection of 4 percent growth for this year. But consumers’ inflation expectations stayed at a high level in December, the data showed.

Korean consumers in December forecast inflation would average 4 percent over the next 12 months, slightly down from 4.1 percent estimated in the previous month, according to the BOK. The central bank aims to keep annual consumer inflation between 2 percent and 4 percent though 2012.

The subindex measuring consumers’ economic growth outlook stood at 78 for this month, down from 86 tallied in November, indicating that the growth projection is getting darker amid the global slowdown.

Yonhap