March Domestic Consumer Sentiment Slightly Improves with Eased Quarantine Measures

Housing Price Outlook Soars, Expectations Rise for Real Estate Regulation Easing

[Asia Economy Reporter Seo So-jeong] The consumer sentiment index slightly increased compared to the previous month due to the government's easing of quarantine measures. The housing price outlook index rose as well, reflecting some expectations of real estate regulation relaxation despite the shift to a decline in apartment sale prices.

According to the 'March Consumer Survey Results' announced by the Bank of Korea on the 29th, the Consumer Sentiment Index (CCSI) recorded 103.2, up 0.1 points from the previous month. The consumer sentiment index fluctuated following a 3.8-point drop in December last year, influenced by the easing of quarantine measures and the spread of variant viruses. Last month, the index fell after a surge in Omicron cases but rose again this month.

The consumer sentiment index is based on a standard value of 100; a value above 100 indicates optimism compared to the long-term average, while a value below 100 indicates pessimism.

Hwang Hee-jin, team leader of the Statistical Survey Team at the Bank of Korea's Economic Statistics Bureau, explained, "The index level exceeded 100, with one of the six component indices rising, two remaining the same, and three declining."

Compared to February, among the six indices composing the CCSI, current living conditions (90) and household income outlook (99) remained at the same level. The living conditions outlook (95) fell by 1 point, and current business conditions (71) and future business outlook (87) each dropped by 4 points. The consumer expenditure outlook (114) rose by 4 points.

The housing price outlook CSI (104) increased by 7 points from February, reflecting some expectations of real estate regulation easing despite the shift to a decline in apartment sale prices. The fact that this index exceeded 100 again means that more respondents expect housing prices to rise.

The interest rate level outlook CSI remained high at 136 due to rising market interest rates and inflation concerns. The employment opportunity outlook CSI rose by 1 point to 94, reflecting expectations of easing quarantine measures.

Both price perception and expected inflation rate rose to 2.9%, increasing by 0.1 percentage points and 0.2 percentage points respectively from the previous month. This is the highest level in 8 years and 2 months, and 7 years and 11 months since January 2014 (2.9%) and April 2014 (2.9%), respectively.