Consumer sentiment in May returned to an "optimistic" stance after a month, the Bank of Korea said on the 22nd. Expectations that the economy will improve have revived. The KOSPI index has been hitting a record high day after day, and strong semiconductor exports helped real gross domestic product (GDP) in the first quarter grow at the fastest pace in 5 years and 6 months.
According to the Bank of Korea's May consumer trend survey, the May consumer confidence index (CCSI) was 106.1, up 6.9 points from April (99.2). A consumer confidence index of 100 or higher means expectations are optimistic, while below 100 means pessimistic.
In particular, expected inflation, which shows the rate of price increases consumers anticipate over the next year, was 2.8%, down 0.1 percentage point from the previous month. A Bank of Korea official said, "Consumers' inflation expectations were found to be positive thanks to price stabilization measures such as the government's oil record high price system." The official added, however, that "whether the decline in expected inflation is temporary needs to be watched in light of future trends in the consumer price inflation rate."
The housing price outlook CSI was 112, up 8 points from the previous month. With regulations imposing heavier capital gains taxes on multiple-home owners starting on the 10th, many people expect real estate sales prices to rise, mainly in Seoul. Some consumers responded in the survey, "It seems jeonse demand will shift to purchases," and "It seems presale prices will rise due to the Middle East situation."
The current living conditions CSI, which shows views on current household finances, was 93, up 2 points from the previous month. Although international oil prices rose due to the Middle East war, many consumers thought the shock was eased by measures such as payments to offset high oil prices. The living conditions outlook CSI, a six-month household finance forecast, was 93, up 14 points from the previous month.