Seoul: South Korea's consumer sentiment climbed to a new four-year high in July, driven by optimism regarding the government's supplementary budget and other economic measures, along with robust export performance, as reported by the central bank on Wednesday. The Bank of Korea (BOK) announced that the composite consumer sentiment index (CCSI) registered at 110.8 this month, rising by 2.1 points from June.
According to Yonhap News Agency, this marks the highest level since June 2021, when the index reached 111.1, and it continues a four-month trend of increases. Last month, the index stood at 108.7, experiencing a surge to a four-year high. Previously, consumer sentiment had dropped below 90 in December following the imposition of martial law by former President Yoon Suk Yeol, remaining in the 90-point range until it surpassed 100 in May. A reading above 100 indicates that optimists outnumber pessimists.
The rise in consumer sentiment is credited to the Lee Jae Myung administration's initiatives designed to stimulate growth and enhance private consumption. Earlier this month, the National Assembly and the Cabinet approved a 31.8 trillion-won (US$22.94 billion) supplementary budget to combat weak domestic demand and external pressures.
A BOK official noted, "Despite uncertainties related to tariff negotiations with the United States, the index rose slightly thanks to improved consumer spending and solid exports." Exports experienced a 4.3 percent increase from the previous year in June, reaching $59.8 billion, propelled by strong global demand for semiconductors, reversing an on-year decline from the previous month.
However, the subindex measuring consumer expectations for housing prices dropped 11 points to 109 in July. This decline comes as the government tightened lending regulations and the pace of home price growth slowed following a recent sharp increase. The BOK noted that July's decrease was the sharpest since July 2022, when the figure fell by 16 points.