The growth of South Korea's private consumption is expected to hit a six-year low in 2019, as consumer sentiment remained downbeat over a prolonged trade war between the United States and China, according to the Bank of Korea (BOK) on Sunday.
The BOK predicted last week that private consumption may grow 1.9 percent on-year in 2019, which would mark the slowest growth since 2013, when it stood at 1.7 percent.
With the nation's export-reliant economy hurt by sluggish investment and global trade disputes, the BOK slashed its growth forecast last week for this year from 2.2 percent to 2 percent.
Weaker private consumption is also attributed to a lackluster growth of household income.
According to government data, the average disposable income per household stood at 3.56 million won (US$3,016) for the third quarter of this year.
A mountain of household debt, which exceeded 1,500 trillion won, has choked off consumer spending.
The BOK, however, expected private consumption to report a modest growth next year.
In a statement, the BOK "expects the sluggishness in exports and facilities investment will ease somewhat, and the consumption growth rate will moderately rise, although the adjustment in construction investment will continue."
Analysts forecast that the trade war between the U.S. and China may ease somewhat next year, though the world's two largest economies are unlikely to reach a complete settlement.
South Korea's exports, the main driver of its economy, have been hit hard by the drawn-out trade dispute, as the two economic powerhouses are its main overseas markets. (Yonhap)