As COVID-19 Risk Decreases Due to Strengthened Quarantine Measures, Consumer Sentiment Revives
[Asia Economy Reporter Seo So-jung] As COVID-19 risk decreased due to strengthened quarantine measures, consumer sentiment rose compared to the previous month.
According to the 'January Consumer Sentiment Survey Results' announced by the Bank of Korea on the 26th, the Consumer Confidence Index (CCSI), which comprehensively reflects economic life sentiment, was 104.4 this month, up 0.6 points from December. Consumer sentiment, which had risen for three consecutive months in September (103.7), October (106.7), and November (107.6), turned downward in December (103.8) but has returned to an upward trend.
Among the six components that make up the Consumer Confidence Index, the largest increase was in the outlook for the future economy (+5 points), and the outlook for consumer spending (+1 point) also rose. On the other hand, the current economic situation assessment (-3 points) declined compared to the previous month.
The housing price outlook (100) fell for the fifth consecutive month amid a slowdown in apartment sale price increases, rising interest rates, and household loan regulations. The perception of consumer price inflation over the past year (price perception) and the expected inflation rate for the next year (expected inflation rate) remained unchanged at 2.7% and 2.6%, respectively, compared to the previous month.
The interest rate level outlook (139) rose due to expectations of additional base rate hikes and inflation concerns. The employment opportunity outlook (92) also increased by 3 points as economic recovery expectations improved.
Hwang Hee-jin, head of the Bank of Korea's Statistical Survey Team, explained, "The Consumer Confidence Index fell last month due to an increase in confirmed COVID-19 cases after the with-COVID-19 policy but rose as the COVID-19 risk decreased following strengthened quarantine measures."
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