SEOUL (Reuters)

South Korea's consumer sentiment has sharply declined, reaching its lowest point in over two years due to increasing worries about political uncertainty following parliament's impeachment of President Yoon Suk Yeol.

The consumer sentiment index dropped to 88.4 in December from 100.7 in November, marking the lowest level since it reached 86.6 in November 2022 after a tragic Halloween crowd crush that resulted in 159 deaths, according to the Bank of Korea's monthly consumer survey.

A Composite Consumer Sentiment Index below the threshold of 100 indicates that consumers are becoming pessimistic about the economy.

Thousands of protesters filled the streets of Seoul following the parliament's vote to impeach President Yoon on December 14, triggered by his brief declaration of martial law on December 3.

Tuesday's data, the first monthly indicator since the crisis stemming from the martial law decree, demonstrates a rapid decline in consumer confidence amid political divisions as constitutional justices prepare to decide on Yoon's potential removal.

In the aftermath of Yoon's martial law announcement, South Korea's benchmark Kospi index fell, and the South Korean won reached its weakest value in 15 years last week.

A sub-index assessing consumer spending outlook decreased by 7 points, with the central bank stating that "domestic political uncertainties worsened consumption sentiment" across various sectors, reflected in declines of 8 points in travel spending, 6 points in dining out, and 3 points in durable goods.

Governor Rhee Chang-yong stated on December 18 that the ongoing political turmoil is impacting South Korea's economy and called for increased fiscal support and measures to ensure sustained growth.