As the KOSPI Races Toward 5000, Consumer Sentiment Surges... Rebounds in Just One Month

January Consumer Sentiment Index at 110.8, up 1.0 points
Stock Market Rally and Expectations for Government Economic Growth Strategy
Housing Price Outlook CSI '124' as an 8-Month Leading Indicator
Highest Level in 4 Years and 3 Months Since O

The Consumer Composite Sentiment Index (CCSI) for January has rebounded after a month. The strong performance of the domestic stock market, including the KOSPI racing toward the symbolic '5000' mark in the Year of the Red Horse, has contributed to improved consumer sentiment. Expectations for the government's new economic growth strategy in the new year also played a role.

January Consumer Sentiment Index Recovers to 110 Level... "Stock Market Rally + Expectations for Government Economic Growth Strategy"

According to the "January 2026 Consumer Survey Results" released by the Bank of Korea on the 23rd, this month's CCSI stood at 110.8, up 1.0 points from the previous month. The CCSI is a sentiment indicator that comprehensively reflects consumers' perceptions of economic conditions. It is calculated using six key indices that make up the Consumer Survey Index (CSI), including current living conditions, household income outlook, and consumption expenditure outlook. The long-term average (from January 2003 to December 2025) is set as the baseline at 100; a reading above 100 indicates optimism compared to the long-term average, while a reading below 100 indicates pessimism.

The CCSI plummeted to 88.2 in December 2024 as consumer sentiment was dampened by the 12·3 Martial Law incident, and remained below the baseline until April last year. In May, the easing of trade risks due to the United States' mutual tariff suspension and expectations for the launch of a new government pushed the index above the baseline. Subsequently, aided by improving consumption and robust exports, it hovered around the 110 level from July onward, reaching 112.4 in November-the highest in eight years. In December, however, it fell to 109.9 due to the burden of a strong won and rising living costs.

On the 22nd, when the KOSPI surpassed 5000 during trading hours, employees at the Hana Bank dealing room in Jung-gu, Seoul, are seen clapping joyfully.

Lee Hyeyoung, head of the Economic Sentiment Survey Team at the Bank of Korea's Economic Statistics Department 1, stated, "This month's CCSI saw a slight increase as the domestic economic recovery continued and expectations for the government's economic growth strategy took effect," adding, "A reading above 110 indicates that consumer expectations are at a higher level than the historical average."

In particular, the KOSPI's sharp rise of about 250 points during the survey period (January 8-15) is assessed to have positively impacted overall consumer sentiment. Lee explained, "The effect of rising stock prices was reflected in various indicators such as living conditions, household savings, and consumption expenditure. Improved investment income led to better living conditions, and household savings-which include stocks and funds-also increased. Consumption expenditure was likewise influenced by the rise in investment income." She also noted that the stock market rally contributed to a more positive perception of the overall economy.

The Current Living Conditions CSI (96) rose by 1 point due to improved domestic demand driven by stock market gains and a recovery in consumption. The Current Household Savings CSI (99) and Consumption Expenditure Outlook CSI (111) also increased by 2 points and 1 point, respectively. In addition, the Future Economic Outlook CSI (98), which forecasts economic conditions six months ahead, rose by 2 points, driven by expectations for the government's economic growth strategy and continued export growth. The Interest Rate Outlook CSI (104) increased by 2 points, reflecting higher market interest rates and weakened expectations for a policy rate cut.

‘Eight-Month Lead’ Home Price Outlook CSI Hits Highest in 4 Years and 3 Months

The Home Price OutlookCSI (124) jumped by 3 points, marking the highest level since October 2021-a span of 4 years and 3 months. Lee attributed this to the continued rise in apartment sale prices nationwide and in the Seoul metropolitan area, noting, "Expectations are at a much higher level than the long-term average (107)." Last year, the Bank of Korea's Economic Research Institute reported in its "Characteristics and Implications of Home Price Expectations" that home price expectations tend to fluctuate significantly over short periods and, once formed, persist for a long time. An analysis of the lagged correlation with actual price growth rates showed that the trend leads by about eight months. At this month's Home Price Outlook CSI level, there is a possibility of home price increases around September this year.

The expected inflation rate for the next year remained unchanged from the previous month at 2.6%. Although the month-on-month increase in consumer prices slowed, the persistently high level of living costs resulted in this outcome.The expected inflation rate for three years ahead was 2.5%, down 0.1 percentage point from the previous month, while the five-year ahead expectation remained steady at 2.5%.

This survey was conducted from January 8 to 15, targeting 2,500 urban households nationwide, with 2,254 households responding.