Korean Economy News
Korea’s consumer sentiment sours in July in line with fourth wave outbreak

[Photo by Han Joo-hyung]

[Photo by Han Joo-hyung]

South Korea’s consumer sentiment soured for the first time this year in July due to the outbreak of the fourth and largest wave of Covid-19 infections amid slow-moving vaccine program.

The composite consumer sentiment index (CCSI) stood at 103.2 in July, off 7.1 percentage points from a month earlier, according to the data from the Bank of Korea.

The hard-won 100 threshold which means people are more optimistic than pessimistic about the economy came under threat with hopes dashed for long-awaited normalization in everyday lives as the country went under toughest-yet social distancing measures with daily cases mired in four-digit number.

All six major indicators that make up the consumer index sank sharply from a month ago, data showed.

Readings for consumer sentiment about current and future economic conditions shriveled 12 points and 17 points to 82 and 92, respectively. Consumer view on current household livelihood sank 2 points to 91, and their expectations for future household income also down 2 points to 98. Their expectations for future spending fell 5 points to 108, and sentiment for future household livelihood also fell 3 points to 96.

The upside is that the pace of fall was slower compared during the second and third waves as consumers still have their hopes for vaccination program, the BOK explained.

The country’s inoculation rate has recently topped 30 percent.

Expectations for interest rate going up rose 2 points to 126, the highest since December 2018 with 132 as the Bank of Korea has strongly signaled a hike within this year to ease financial imbalance.

Expectations for job opportunities worsened with the related index falling 16 points to 87. Expectations for housing price rise continued, adding 2 points to 129 amid little sign of easing in the runaway prices.

Consumers’ perceived inflation over the past one year was 2.3 percent, up 0.1 percentage point from a month ago. Expected inflation for the following year was unchanged at 2.3 percent.

By Lee Soo-min

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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