(Bloomberg) -- South Koreans’ outlook for the economy deteriorated at the fastest pace in more than two years in November, according to a monthly central bank survey conducted after Donald Trump’s US election victory.
An index representing consumer expectations for economic momentum fell seven points to 74, according to the Bank of Korea on Tuesday. It marked the largest drop since the summer of 2022 when many central banks around the world accelerated their interest rate hikes to fight inflationary pressure.
A composite index showing broader consumer sentiment edged down by one point to 100.7, barely above the threshold dividing optimism and pessimism. The survey illustrates weakening optimism after the economy barely grew in the third quarter from the previous three months.
The outlook among economists for next year also dimmed after Trump won the Nov. 5 vote with pledges to get tougher on trading partners recording large surpluses against the US.
South Korea ranks eighth among nations with net gains in trade against the US. Its reliance on exports leaves the nation particularly vulnerable to tariffs. China, against which Trump pledged 60% duties, is South Korea’s biggest trading partner.
The outlook among consumers for housing prices also fell by 7 points in November. Real estate prices are a key consideration for the central bank, which seeks to safeguard financial balance by reining in household debt. The BOK meets for a rate decision on Thursday, following a policy pivot with a quarter-point cut last month. The majority of economists expect the central bank to hold for now, instead of opting for back-to-back cuts.
©2024 Bloomberg L.P.