Domestic demand feared to be further dented in Q2: analystsUpdated: 2014-05-05 18:13:20 (KST)
Analysts fear that South Korea's domestic demand will take a major hit in the second quarter as consumers have reduced their spending amid the Sewol-ho ferry tragedy.
According to Statistics Korea on Monday, the country's composite leading index marked 101.two in March, down zero.three percentage point from the previous month.
This is the second consecutive month the index declined after it reached a four-month high in January at 101.six.
But the cyclical component of the composite coincident index, which measures the current economic situation, remained unchanged from February to stand at 100.seven in March.
Experts say the ferry tragedy may have hurt consumer sentiment in the short term, along with the temporary business suspensions of mobile carriers, which negatively impacted smartphone sales.
And experts say, income growth remained tepid as domestic demand remains sluggish.
However, it seems overall, consumer sentiment has held steady.
In a separate report by the Bank of Korea, Korea's consumer sentiment, which deals with overall economic outlook, held at 108 for April, unchanged from the previous month.
Meanwhile at a ministry meeting on Sunday, finance minister Hyun Oh-suk called on his office to look into how much of an impact the ferry incident has had on the local economy.
He also emphasized the importance of supporting the victim's families and countermeasures for related industries, including tourism, which have suffered some difficulties since the incident.
Kim Hyun-bin Arirang News.
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