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ANZ-Roy Morgan South Korean Consumer Confidence: South Korea's Declining Consumer Confidence Requires Imminent Policy Easing
November 25 2014
- Finding No.
Consumer Confidence Press Release
The monthly ANZ-Roy Morgan South Korea Consumer Confidence Index is based on 1,000 telephone interviews conducted throughout South Korea. Men and women aged 14 and over were randomly selected during the month of November 2014.
ANZ’s Senior Economist Raymond Yeung said:
- ANZ-Roy Morgan South Korea Consumer Confidence fell for the third straight month to 78.6 (down 2.8pts) in November, the lowest level in 2014 and well below the year-to-date average level of 89.1.
- In terms of current personal finances, only 11% (unchanged) of respondents say their families are ‘better off’ financially than the previous year, while 44% (down 1ppt) of respondents say that their families are ‘worse off’. Looking ahead, only 26% (down 2ppts) expect their families will be ‘better off’ financially the same time next year, while 36% (up 1ppt) say the financial condition will be ‘worse off’ next year, a new record high.
- Regarding future economic conditions in South Korea, only 21% (down 4ppts) of respondents expect South Korea will have ‘good times’ economically over the next twelve months, reaching a new record. Nearly two-thirds of respondents, 64% (up a large 5ppts), see ‘bad times’ economically, rising to a new record high. In terms of longer-term forecast, pessimistic respondents (44%, up 2ppts) also dominate, hitting a record high this year.
- Inflation expectation of the surveyed households declined substantially to 3.0% in November, compared with 4.1% last month.
“November’s result warrants serious attention. The reading of 78.6 was even lower than the level in May (89.2) when the nation was badly hit by Sewol ferry accident. All forward looking indicators are weakening, suggesting a severe worsening of domestic demand.
"The result is consistent with our call for the central bank to cut interest rates imminently in order to revive domestic demand and prevent South Korea from falling into a deflationary trap. The sharp drop of inflation expectation of 110 basis points in November offers strong evidence to back our call.”
Click to view the latest ANZ-Roy Morgan South Korean Consumer Confidence Release PDF - November 2014.
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