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Consumer sentiment dips to 8-month low in July

Economy 06:00 July 26, 2019

SEOUL, July 26 (Yonhap) -- South Korea's consumer sentiment reached the lowest level in eight months in July, central bank data showed Friday, amid growing concerns that Asia's fourth-largest economy could lose more growth momentum amid protracted trade tensions.

The composite consumer sentiment index came to 95.9 this month, down 1.6 from a month earlier, according to the data from the Bank of Korea (BOK).

The reading marks the lowest since November when the index stood at 95.7. A reading below the benchmark 100 means pessimists outnumber optimists

The drop apparently follows Japan's export restrictions on three materials used to produce semiconductors and display panels, both key export items of South Korea, in apparent retaliation against Seoul over a recent court decision ordering Japanese companies to pay compensation to Korean workers forced into labor during Japan's 1910-45 colonial rule of Korea.

In the photo, taken July 24, 2019, South Korea's commerce minister Sung Yun-mo (L at podium) holds a press conference in Seoul to urge the Japanese government to withdraw its export curbs on South Korea. (Yonhap)

South Korea's exports have been on a steady decline since December. Many believe Japan's export curbs will further undermine South Korean exports, but also disrupt global supply chains for the two IT products.

Last week, the central bank slashed its growth outlook to 2.2 percent from 2.5 percent forecast three months earlier, citing a number of economic headwinds facing South Korea, including the U.S.-China trade dispute and Japan's export curbs.

In the monthly survey, those surveyed saw no immediate changes to their living conditions as the index measuring their sentiment toward their own economic conditions remained flat from the previous month at 91, with the index measuring their future conditions also staying unchanged at 92.

However, the index measuring the respondents' outlook on conditions facing Asia's fourth-largest economy dropped to 67 in July from 69 the month before. The index for their outlook on economic conditions six months dropped to 70 from 75 over the cited period.

The latest survey was conducted July 10-17, involving some 2,400 households throughout the nation.

bdk@yna.co.kr
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