Consumer sentiment frozen amid turbulent political climate

[Anchor]

The political situation is unstable, and its impact on the economy is growing.

In particular, the cancellation of company dinners and group reservations is hitting self-employed individuals hard, who were hoping for a year-end boost.

First, we have reporter Park Min-cheol.

[Report]

This is a restaurant located in Jongno-gu, Seoul, where government buildings and businesses are concentrated.

Unlike previous years, which were bustling with year-end gatherings and parties, group reservations have noticeably decreased since the declaration of martial law.

In particular, cancellations from public officials are occurring frequently.

Restaurant owners are afraid of losing even their few regular customers, so asking for cancellation fees is out of the question.

[Restaurant Employee: "We can't really ask for (cancellation fees), you know. If they say, 'You know how things are right now,' I don't have anything more to say."]

The situation is similar in the Yongsan area, which had emerged as a new commercial district after the relocation of the presidential office.

Since the martial law situation, the number of visitors has sharply declined, leaving self-employed individuals running restaurants and bars sighing in despair.

[Bar Owner: "The foot traffic on the streets has decreased significantly. Places like this bar or large restaurants usually benefit from the year-end rush, but due to the martial law, it seems we won't be able to enjoy that boost..."]

According to KBS's analysis of late-night restaurant and bar transaction amounts from a credit card company, sales on the day after the impeachment vote fell through dropped by as much as 4.5% compared to the previous week.

This indicates that consumer sentiment is freezing, which aligns with research findings that show an increase in political uncertainty leads to a decrease in the growth rate of retail sales, a key indicator of domestic economic activity.

[Joo Won/Director of Economic Research at Hyundai Research Institute: "When the future is uncertain, there is a motivation to reduce current consumption to prepare for the future. That’s why consumption seems to be shrinking."]

The fact that this situation arose just a day after the president's promise to support self-employed individuals, and that it coincided with the crucial year-end period, has led to even greater lamentations on the ground.

["This is a cold noodle restaurant, so we only make sales in December during the winter. But if all those reservations are canceled, what will happen to our employees?"]

KBS News, Park Min-cheol.