Ferry tragedy hits consumer spending in South Korea

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 percent — 8.7 billion won ($8.2 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 percent) 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 percent in the three months to March for the second consecutive quarter, with exports remaining solid but domestic spending stalled.