Consumer confidence weakens continuously

It seems that the nation's consumer confidence has been weakening continuously. Consumption accounts for nearly 60% of the nation's gross domestic product, so the stagnant consumption could lead to long recession of the Korean economy.

The National Statistical Office announced that October's consumer evaluation index dropped by 2.5 points from the previous month to 77.5, which is the lowest level since November 1998's 65.9%.

Also, the consumer expectation index, which indicates consumption trends after six months, also dropped from September's 90.9 to 89.8 in October, the lowest since December 1998. Both the consumer evaluation index and the consumer expectation index declined four straight months since last July.

It means that the number of households that reduced consumption has increased more than the number of those that have increased consumption.

Han Sung-Taek, head of the economic policy bureau of the Ministry of Finance and Economy, attributed the deteriorating consumer confidence to weakened purchasing power from the slowdown in economic growth, the slump of the stock market and a feeling of uneasiness stemming from corporate restructuring.

Kwon Sun-Hwal shkwon@donga.com