SEOUL: South Korea's consumer sentiment has recovered from a two-year low in January as the country is struggling to navigate political turmoil sparked by President Yoon Suk Yeol's shocking martial law declaration, a central bank poll showed Wednesday. The composite consumer sentiment index stood at 91.2 this month, up 3 points from the previous month's 88.2, according to the survey conducted by the Bank of Korea (BOK).
According to Yonhap News Agency, it marked the sharpest growth since May 2023 and the first on-month gain in three months. In December, the index fell sharply to 86.6, the lowest since November 2022, as Yoon's martial law declaration and his subsequent impeachment dented the market and worsened consumer sentiment. A reading above 100 means optimists outnumber pessimists, while a reading below the benchmark means the opposite.
"The increase was led by expectations for eased political uncertainties and hopes for a softer stance on tariffs by the new U.S. government. But major indexes for January still fell below a longer-term average," a BOK official said. The National Assembly voted to impeach Yoon last month pending a final court ruling. Yoon was detained and then formally arrested last week.
The political crisis came at a time when the country is projected to log slower economic growth on weak exports and sagging domestic demand. The BOK earlier forecast the South Korean economy to expand 1.9 percent in 2025, slowing from last year's 2.2 percent expansion, but the 2025 figure is widely expected to be lowered further. Uncertainties also remain high regarding new policy measures under the new Donald Trump administration, as Trump has vowed to impose high tariffs on imported goods and to implement a series of protectionist measures.