South Korea’s Consumer Sentiment Declines as Food Inflation Emerges as Key Election Issue, Reports Reuters

South Korea’s Consumer Sentiment Declines as Food Inflation Emerges as Key Election Issue, Reports Reuters

© Reuters. FILE PHOTO: A trader takes a nap while waiting for customers at a traditional market in Seoul, South Korea April 7, 2022. REUTERS/Kim Hong-Ji/File Photo

By Jihoon Lee

SEOUL (Reuters) – South Korean consumer confidence fell sharply in March due to growing concerns over rising agricultural prices, a central bank survey showed on Tuesday, as inflation emerges as a problem political major in next month’s elections.

The consumer confidence index fell to 100.7 in March from 101.9 in February, posting the biggest monthly decline since October, according to the Bank of Korea’s monthly consumer survey.

Consumer inflation expectations for the next 12 months rose for the first time in five months, from 3.0% to 3.2%, the survey showed, with two-thirds of respondents saying that inflation prices agricultural products would stimulate inflation.

This was an increase from 51.5% the previous month when answering the same question.

South Korea’s consumer inflation accelerated in February, after three months of slowing, due to supply-side pressures, mainly from rising agricultural prices.

Experts have attributed the rise in agricultural prices partly to bad weather, but the opposition Democratic Party (DP) has criticized President Yoon Suk Yeol’s government for mismanaging the economy.

“The economy is collapsing and prices are skyrocketing,” Democratic Party leader Lee Jae-myung told a campaign rally at a major produce market on Sunday.

South Koreans are heading to the polls to elect 300 members of parliament and Yoon’s conservative People Power Party is locked in an uphill battle to win back the majority now held by the opposition.

Consumer inflation made headlines after Yoon went to a supermarket last week and picked up a pack of green onions, saying “I would say 875 won ($0.65) is a reasonable price,” apparently unaware that the item was on sale and subject to heavy government enforcement. grant.

Opposition party members and consumer groups have criticized Yoon for being out of touch with reality, when the same product is normally sold for more than 4,000 won.

Last week, after Yoon ordered “extraordinary measures” to rein in “basket inflation,” the government earmarked 150 billion won to inject subsidies and increase supply through imports. direct.

He also announced that he would temporarily reduce tariffs on imported agricultural products.

In recent days, South Koreans have been seen rushing to major grocery stores and lining up to buy apples and green onions provided at lower prices thanks to government subsidies, local media reported.

($1 = 1,337.3800 earned)

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