Semiconductor Exports Cut Through Stock Market Gloom, Consumer Sentiment Optimistic for Third Straight Month

[Financial News] South Korean consumers' outlook on the economy has moved in an optimistic direction for three straight months. A strong export performance led by semiconductors offset falling stock prices and rising inflation, lifting sentiment about the economy.
According to the results of the July 2026 Consumer Tendency Survey released by the Bank of Korea on the 28th, the Composite Consumer Sentiment Index (CCSI) stood at 106.8 in July. That was up 0.2 points from 106.6 in the previous month. After briefly falling below 100 in April for the first time in a year, the index rebounded in May with a 6.9-point jump and has risen for three consecutive months since then.
The CCSI is a sentiment indicator calculated using six major sub-indexes from the Consumer Sentiment Index. The CSI is a statistical measure based on surveys of 2,500 urban households nationwide about their views on economic conditions and expectations for future consumer spending. The survey was conducted from July 13 to 21.
The CCSI uses the long-term average for January 2023 to December 2024 as its benchmark of 100. A reading above 100 indicates optimism, while a reading below 100 indicates pessimism.
Lee Heung-hoo, head of the Economic Tendency Survey Team at the Bank of Korea's Economic Statistics Department 1, explained that "despite weaker sentiment caused by falling stock prices and rising prices, strong exports and investment centered on semiconductors, along with expectations for wage increases, were the main factors."
Looking at perceptions of household financial conditions, the current living conditions CSI and the future living conditions CSI stood at 93 and 98, respectively. That was down 1 point and up 1 point from the previous month. The household income outlook CSI rose 1 point to 101, while the consumer spending outlook CSI remained unchanged at 110.
On the broader economy, respondents were more pessimistic about the present than the future. The current economic conditions CSI fell 2 points to 84, while the future economic outlook CSI was unchanged from the previous month at 92. Lee said of the latter that "concerns over the economy grew as tensions in the Middle East flared up again, but growth forecasts from major institutions were raised on the back of strong semiconductor conditions, leaving the index unchanged from the previous month."
The employment opportunity outlook CSI and the interest rate outlook CSI were both unchanged from the previous month at 89 and 126, respectively. The latter had been revised upward every month since October last year, rising from 93 to 95, before turning slightly lower in May and then rebounding sharply in June. The latest reading is the highest since October 2023, when it stood at 128, and the increase was the largest since December 2016, when it rose 12 points.
In perceptions of household savings and debt, the current household savings CSI and the household savings outlook CSI both fell 1 point from the previous month to 97 and 100, respectively. The current household debt CSI and the household debt outlook CSI both rose 1 point to 100 and 98.
In perceptions of price conditions, the price level outlook CSI fell 1 point from the previous month to 149, while the housing price outlook CSI rose 7 points to 127. After easing to 96 in March, it has climbed for four consecutive months. The increase was driven by continued gains in apartment sale and jeonse prices, especially in Seoul and Gyeonggi Province.
The wage level outlook CSI was unchanged from the previous month at 124.
Perceptions of consumer price inflation over the past year were unchanged from the previous month at 3.0%. Expected inflation for the next 1 year fell 0.1 percentage point from the previous month to 2.7%. For the 3-year and 5-year horizons, both stood at 2.6%, down 0.1 percentage point and unchanged from the previous month, respectively. Across all time frames, the share of responses in the 2% to 3% range was the highest, at 31.5%, 31.4%, and 30.0%, respectively.
As for the items expected to have the biggest impact on consumer prices over the next year, petroleum products ranked first at 57.5%, followed by agricultural, livestock and fishery products at 34.1% and public utility charges at 33.6%. Compared with the previous month, the share for petroleum products fell 20.0 percentage points, while the other two rose 5.5 points and 4.0 points, respectively.

[email protected] Kim Tae-il Reporter