Forward expectations fall fastest since Dec. 2024 while inflation fears rise, highlighting early-stage demand risks

South Korea’s consumer sentiment fell to a 10-month low in March, with the composite consumer sentiment index declining 5.1 points from the previous month to 107.0, the Bank of Korea said Wednesday. The drop marked the steepest monthly fall since Dec. 2024 and reversed gains recorded in January and February.

The decline was driven by a sharp deterioration in forward-looking indicators, with expectations for future economic conditions falling 13 points and assessments of current conditions down 9 points. Outlooks for household income and living standards also weakened, while consumption expectations remained unchanged. Inflation expectations for the next year rose to 2.7%, up 0.1 percentage point from February, with respondents citing oil prices as the primary driver amid heightened volatility linked to the Middle East conflict.

South Korea’s consumer sentiment fell to a 10-month low in March, with the composite consumer sentiment index declining 5.1 points from the previous month to 107.0, the Bank of Korea said Wednesday. The drop marked the steepest monthly fall since Dec. 2024 and reversed gains recorded in January and February.

The decline was driven by a sharp deterioration in forward-looking indicators, with expectations for future economic conditions falling 13 points and assessments of current conditions down 9 points. Outlooks for household income and living standards also weakened, while consumption expectations remained unchanged. Inflation expectations for the next year rose to 2.7%, up 0.1 percentage point from February, with respondents citing oil prices as the primary driver amid heightened volatility linked to the Middle East conflict.

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