(MENAFN- Qatar News Agency) Seoul May 05 - South Korea's domestic demand is feared to have been further sapped in the second quarter as the deadly sinking of the passenger ferry Sewol is likely to crimp consumer spending analysts said Monday.
Korea's cyclical component of the composite leading index came in at 101.2 in March down 0.3 percentage point from the previous month according to the statistics agency. The index is used to predict turning points in business cycles according to South Korea's (Yonhap) News Agency.
The index declined for the second straight month after hitting 101.6 in January following a rise for four straight months the data showed.
In what may be a worrying sign private spending rose 0.3 percent on-quarter in the first quarter after advancing 0.6 percent in the fourth quarter according to the data by the central bank.
Experts said that in the second quarter consumer spending may be further crimped following the deadly sinking of the ferry Sewol.
"There is a possibility that the recovery of domestic demand may slow in the second quarter. Downside risks increased compared with the first quarter" said Lee Seung-hoon an analyst at Samsung Securities Co.
He said that the Sewol tragedy may hurt consumer sentiment in the short term and business suspensions of mobile carriers by the telecom regulator could reduce sales of smartphones.
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