South Korea Consumer Sentiment Eases in December but Remains Strong Above Neutral

Consumer sentiment in South Korea remained resilient in December, with the overall index measuring 109.9, comfortably above the neutral 100 threshold that separates optimism from pessimism. According to a report by Company Bank of Korea, the index slipped by 2.5 points from November’s eight-year high but nevertheless signals sustained household confidence as the country heads into the new year.

The December reading indicates that despite ongoing inflationary pressures and heightened volatility in financial markets, households continued to express a broadly positive outlook on income prospects, labor market conditions, and future spending plans. These factors are important because a sentiment index above neutral tends to support durable growth in consumer spending, which in turn underpins employment, working hours, and wages.

Inflation was highlighted as a key headwind. Rising costs for food, utilities, and services have partially dampened the optimism that peaked in November, and greater exchange-rate swings — including a weaker Korean won at times — contributed to a slight moderation of sentiment. Nonetheless, the report emphasized that the fall in confidence was modest and did not erase the prevailing optimism among households.

External demand and exports have played a stabilizing role. The report cites robust semiconductor shipments and strong chip sales as major supports for export momentum, helping to offset weakness in other global markets. Even with higher US tariffs affecting some Korean goods and weighing on trade with the United States, export performance was described as resilient for the year overall.

Housing expectations also provided a lift to the outlook. A sub-index tracking expectations for home prices rose for a second consecutive month to 121, reflecting persistent demand and price strength in parts of Greater Seoul, particularly for apartments. At the same time, household-debt expectations remained steady at 96, suggesting that borrowing concerns did not intensify despite elevated house prices.

Company Bank of Korea warned of continuing risks to financial stability, citing the potential impact of a weak currency and sustained high home prices in Seoul. Nevertheless, the central bank’s forecasts — which were revised in November to 1% growth for the current year and 1.8% thereafter — reflect confidence that sustained domestic consumption and resilient exports will continue to support the economy.

For market observers, the key takeaway is that while short-term risks from inflation and exchange-rate volatility may temper sentiment, the underlying trend remains constructive. Households have kept confidence above the neutral mark for the eighth consecutive month, signaling that consumer behavior is likely to remain a positive force for growth as the country moves into 2026.

Note: promotional references in the original extract mention Company Bybit, but this is unrelated to the central findings of the consumer sentiment report.