The recovery in consumption and strong exports has driven consumer sentiment to its highest level in 7 years and 7 months.
According to the Bank of Korea's 'August Consumer Trend Survey' released on the 26th, this month's Consumer Sentiment Index (CCSI) rose to 111.4, an increase of 0.6 points from last month (110.8). This is the highest level since January 2018 (111.6). A Consumer Sentiment Index above 100 indicates a positive economic outlook compared to the long-term average (2003-2024).
The effects of fiscal expansion through the supplementary budget, including the support fund for recovery of livelihoods, and the revival of exports appear to have bolstered consumers' perceptions of the economy. In fact, prices have continued to rise for five consecutive months since April.
In terms of detailed indices, the current economic assessment index (93) increased by 7 points in a month, leading the overall rise. The current living conditions index (96) also improved slightly by 2 points. In contrast, the future economic outlook index (100) dropped by 6 points due to tariff risks from the United States and other external uncertainties.
Lee Hye-young, head of the Economic Psychology Survey Team at the Bank of Korea, noted, "The increase in the current economic assessment index by 7 points, due to improvements in consumption and sustained strong exports, led to the rise in the overall consumer sentiment index," and added, "Conversely, the future economic outlook index fell due to concerns regarding upcoming export declines as a result of tariffs imposed by the United States."
The housing price outlook index, which shows consumer judgment on housing prices a year from now, is at 111, rebounding by 2 points from July. It significantly dropped right after the announcement of the 'household debt management measures' in June but showed a rising trend again within a month. However, it still falls short of the level recorded in June (120).
The expected inflation rate, which is the projected increase in consumer prices over the next year, is at 2.6%, rising by 0.1 percentage points from the previous month. The pressure on consumer prices eased somewhat due to declining oil prices, but the prices of processed marine products remained elevated, sustaining an upward trend. The interest rate outlook index (95) remained at the same level as last month.