Archive · 16 Jan 2026
BOK Warns of US Consumption Drop Impact
The Bank of Korea (BOK) said that if US stock prices drop a lot, like they did during the dot-com bubble, it could make people in the US spend less money.
This could hurt the US economy and also affect South Korea because South Korea's economy is connected to the US.
The BOK also said they will keep helping small businesses and self-employed workers with a special loan program for six more months because some parts of the economy are not recovering quickly.
They think that if there's a big problem in the US, like a big drop in stock prices, it could make things harder for South Korea too.
A 10% decline in US stock prices could reduce annual consumption growth by 0.3 percentage points.
A 30% drop, similar to the dot-com bubble, could cause consumption growth to fall by 1.7 percentage points.
US household purchasing power is expected to rise moderately, but risks from employment and inflation remain.
Widening income and asset inequality could increase vulnerability to economic shocks.
South Korea's economy is influenced by US investment in AI and household demand, requiring close monitoring of risk factors.
- Who
- Bank of Korea (BOK)
- What
- Warning about potential US consumption drop due to stock market plunge
- When
- Friday (specific date not mentioned)
- Where
- South Korea
- Why
- To highlight risks to US and South Korean economies from potential stock market declines
- Potential US stock decline
- 10%
- Reduction in annual consumption growth
- 0.3 percentage point
- Sharper stock drop
- 30%
- Consumption growth fall
- 1.7 percentage points
- Financial support program extension
- 6 months
- Program value
- 14 trillion won (US$9.51 billion)