Seoul: South Korea's consumer sentiment reached its highest level in over seven years this August, reflecting strong export performance and positive expectations associated with the government's supplementary budget, as reported by the central bank on Tuesday.
According to Yonhap News Agency, the composite consumer sentiment index (CCSI) stood at 111.4 for the month, reflecting an increase of 0.6 points from July, based on a survey conducted by the Bank of Korea (BOK). This marks the fifth month in a row that the index has climbed, reaching its highest point since January 2018, when it was at 111.6.
The index had previously dropped below the 90 mark in December due to the imposition of martial law by former President Yoon Suk Yeol. It remained in the 90-point range until it surpassed 100 in May. A reading above 100 indicates that optimists outnumber pessimists, whereas a figure below 100 suggests the opposite.
The rise in August is attributed to improved private spending, bolstered by stimulus measures from the Lee Jae Myung government aimed at enhancing growth momentum and boosting private consumption. Additionally, robust export activity played a significant role in this increase.
Exports, which are a crucial engine for growth, rose by 7.6 percent on-year in the first 20 days of August, driven by strong demand for semiconductors and automobiles. This follows a 5.9 percent increase in exports in July compared to the previous year.
Retail sales, an indicator of private spending, increased by 0.5 percent on a month-to-month basis in July, supported by strong demand for clothing and cosmetics, according to government data.
A BOK official, Lee Hye-young, stated during a press briefing, "The subindex for current economic conditions rose by 7 points, driven by improvements in consumption and continued strong exports, leading the overall increase in consumer sentiment." However, the official noted that the future economic outlook index declined due to concerns over a potential export slowdown resulting from tariffs imposed by the United States.