Consumer Sentiment Restores to Pre-Martial Law Levels… Turns 'Optimistic' in 6 Months

The Consumer Sentiment Index (CCSI), which reflects consumers' perception of the economy, showed the largest increase in 4 years and 6 months. This was due to the spread of expectations for the new government's launch, including the U.S. mutual tariff suspension and the supplementary budget plan.

According to the consumer trend survey released by the Bank of Korea on the 27th, this month's CCSI was 101.8, up 8p from the previous month. It was the highest in seven months since October last year (101.8) and exceeded the 100 mark for the first time since November last year, just before the martial law incident. The increase from the previous month was the largest since October 2020 (12.3p).

CCSI is a psychological indicator that comprehensively reflects consumers' sentiment on economic conditions. It is calculated using six major indices among the 15 consumer sentiment indices (CSI) and is compared to the long-term average (2003∼2024). If it is greater than 100, it means consumer sentiment is optimistic, and if it is below 100, it is pessimistic.

Lee Hye-young, head of the Bank of Korea's Economic Sentiment Survey Team, explained, "The consumer sentiment index has greatly improved as negative factors such as political uncertainty and U.S. tariff policies that have constrained consumer sentiment recovery have eased." She added, "There was also some base effect from the previously low index level, and it remains to be seen whether this trend will continue as it reflects future economic expectations."

Compared to the previous month, all six indices that make up the CCSI rose. The outlook for living conditions rose by 5p to 97, while the current living conditions and household income outlook each rose by 3p to 90 and 99, respectively. In particular, the outlook for future economic conditions (91, +18p) and the current economic assessment (63, +11p) jumped by double digits. This is attributed to the passage of the supplementary budget bill in the National Assembly and expectations for progress in the Korea-U.S. tariff negotiations.

Meanwhile, expectations for house price increases continued this month. The housing price outlook consumer sentiment index rose by 3p to 111 compared to the previous month. It has been on the rise for three consecutive months since February this year, reaching its highest level since November last year (109). This index exceeds 100 when the number of respondents expecting house prices to rise in a year is greater than those expecting a decline. Team leader Lee said, "The housing price outlook index is heavily influenced by the current real estate market," and "as the upward trend in metropolitan apartment prices continues, more people expect real estate prices to rise."

eastcold@fnnews.com Kim Dong-chan reportereastcold@fnnews.com Kim Dong-chan reporter