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South Korean consumer sentiment held well above the neutral level in December for eight consecutive months, supporting household confidence.  The latest signs indicate that consumer sentiment remains broadly positive regarding the economic outlook, even as prices continue to rise and financial markets become jittery.  And while inflation has increased the price of goods and services on a day-to-day basis, and fluctuations in the equity market have added to the pressure on the growth trend, they have not been large enough to alter the overall optimism significantly.  The overall consumer sentiment index hit 109.9 in December, according to the Bank of Korea’s report on Wednesday. That was a 2.5 point decrease from November’s eight-year high, but well above a neutral 100, which helps demarcate optimism from pessimism.  At this metric, consumer sentiment is strong enough to provide robust support for durable growth in consumer spending, and with it, working hours and wages.  Here, the point is that optimism moderation was coupled with a widening range of consumer prices and greater currency volatility. Those measures have somewhat subdued household sentiment, but in general, confidence is stronger than in past eras of economic uncertainty. Rising prices and currency swings weigh on confidence Inflation remained a problem for households as they approached the end of last year, despite the continued rise in costs of food, utilities, and services. These price pressures “partially dampened” some of the optimism experienced in November, when confidence peaked at its highest level in eight years, the Bank of Korea said.  The slight decrease was the result of higher consumer prices and a greater exchange rate volatility, the central bank added. Still, exports have been broadly resilient this year, bolstered by strong semiconductor shipments. That’s despite higher US tariffs on Korean goods that have impacted Seoul’s second-largest export market. Importantly,…

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Filed under: News - @ December 24, 2025 4:25 am