Ferry tragedy hits consumer spending in South Korea: report

A South Korean woman attaches a yellow ribbon of hope for the safe return of missing passengers as people attend a memorial for the victims of the sunken South Korean ferry Sewol in Seoul on April 28, 2014. -- PHOTO: AFP
A South Korean woman attaches a yellow ribbon of hope for the safe return of missing passengers as people attend a memorial for the victims of the sunken South Korean ferry Sewol in Seoul on April 28, 2014. -- PHOTO: AFP

SEOUL (AFP) - South Korean consumers have reined in their spending since the ferry sinking that is believed to have claimed 300 lives, as a sombre mood grips the nation, a report said Monday.

Entertainment spectacles have been cancelled and product launches have been put back as Koreans watch wall-to-wall coverage of the April 16 disaster and its aftermath.

Daily credit card use dropped 4.4 per cent - 8.7 billion won (S$10.5 million) - on month in the week after the Sewol sank with 476 people on board, the Korea Herald reported, citing company data from a major credit card firm.

The firm, which was not named, had recorded rising card use in the week leading up to the tragedy.

Korea University's Oh Jung-Keun said any prolonged fall-off could have a measurable impact on the economy as a whole.

"GDP growth could stay below the projection (3.9 per cent) of the Bank of Korea because the consumption growth has slowed again after the ferry Sewol accident," Oh said, according to the paper.

Figures released last week by the central bank showed South Korea's economy grew by 0.9 per cent in the three months to March for the second consecutive quarter, with exports remaining solid but domestic spending stalled.