February Consumer Sentiment Survey
Exceeds 100 for Two Consecutive Months
The Consumer Sentiment Index has shown an optimistic trend for the second consecutive month. This is due to the continued slowdown in inflation and improvements in exports.
According to the "February 2024 Consumer Survey Results" released by the Bank of Korea on the 20th, the Consumer Sentiment Index (CCSI) in February rose by 0.3 points from the previous month to 101.9. This marks the third consecutive month of increase, surpassing the baseline of 100 for the first time in five months since August last year (103.3), and maintaining above 100 this month as well.
The CCSI is a composite sentiment indicator reflecting consumers' perceptions of the economic situation. It is calculated using six major indices from the Consumer Survey Index (CSI), with the long-term average (from January 2003 to December 2023) set as the baseline value of 100. A value above 100 indicates optimism, while below 100 indicates pessimism.
The Consumer Sentiment Index showed a continuous decline for five months from July last year (103.4), August (103.3), September (99.8), October (98.2), to November (97.3), but began to rise from December (99.7) and exceeded 100 from January this year (101.6).
The Interest Rate Expectation Index, which had fallen for three consecutive months until last month, rose by 1 point to 100 as expectations for an early rate cut in the U.S. receded and the decline in market interest rates stabilized.
The Housing Price Expectation Index (92) remained at the same level as the previous month despite the continued decline in housing sale prices, supported by real estate policies such as the implementation of special loans for newborns and plans to extend and establish GTX lines.
The Inflation Expectation Index (144) rose by 1 point as the perceived prices of agricultural products and dining-out services remained high despite the slowdown in consumer price inflation. This indicates that many view achieving the "last mile" (the final phase toward the inflation target) as challenging.
The major items expected to influence consumer price inflation over the next year were public utility charges (59.3%), agricultural, livestock, and fishery products (51.5%), and petroleum products (29.0%). Compared to the previous month, the response shares for petroleum products (up 6.7 percentage points) and agricultural, livestock, and fishery products (up 5.6 percentage points) increased, while that for public utility charges decreased by 0.4 percentage points.
Hwang Hee-jin, head of the Statistical Survey Team at the Bank of Korea's Economic Statistics Bureau, said, "Items closely related to daily life, such as food and gasoline prices, account for a large share," adding, "The recent sharp rise in prices of agricultural, livestock, and fishery products has increased their response share." He also noted, "Public utility charges have maintained a high share of 50-80% since October 2022."
The expected inflation rate, which reflects the general public's perception of prices one year ahead, remained steady at 3.0%, the same as the previous month. The expected inflation rate hit its lowest level in 1 year and 10 months last month at 2.9% since March 2022, and has remained stable this month as well.
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