Consumer sentiment in South Korea rebounded after one month as expectations for better income conditions grew on the back of solid real economic activity.
The composite consumer sentiment index (CCSI) stood at 106.6 in September, up 2.1 points from the previous month, according to the September consumer survey released by the Bank of Korea on the 23rd. The index had risen for three straight months from May before falling last month on a sharp stock market decline, then turned higher again after one month.
The CCSI is compiled from six key components of the consumer survey index (CSI), which polls consumers on their perceptions of economic conditions and their outlook. A reading above 100 indicates sentiment is more optimistic than the long-term average for 2003 through 2024, while a reading below 100 indicates pessimism.
A Bank of Korea official said consumer sentiment rebounded as volatility in domestic stock markets narrowed and expectations rose for improved income conditions on the strength of the real economy.
By component, the index for expected household income rose 2 points to 102, while the index for current economic conditions gained 4 points to 83.
The housing price outlook index was unchanged from the previous month at 125. A reading above 100 means more consumers expect home prices to rise a year from now. The index has stayed above 100 for six months since April. The central bank said the index has held at a high level as upward factors such as the steep rise in apartment prices in the greater Seoul area offset downward factors including housing policy measures and an increase in the base rate.
Inflation expectations for the next year came in at 2.7%, the same as the previous month. The Bank of Korea said the reading was flat as upward factors, including higher global oil prices following renewed conflict in the Middle East, were offset by downward factors such as monetary tightening and a stronger exchange rate (won appreciation).
