January Consumer Sentiment Rebounded... But Bank of Korea Expects Impact of Wuhan Pneumonia in February

January Consumer Sentiment Index 104.2... Up 3.7p from Previous Month
Housing Price Outlook CSI Down 9p Due to Real Estate Measures Impact

[Asia Economy Reporter Kim Eun-byeol] The Consumer Sentiment Index (CSI) showed an upward trend in January. However, since the impact of the novel coronavirus infection (Wuhan pneumonia) was not reflected during the survey period, it is expected that consumer sentiment will decline again in February.

According to the 'January Consumer Survey Results' announced by the Bank of Korea on the 29th, the Consumer Sentiment Index (CCSI) for this month was 104.2, up 3.7 points from the previous month.

This index is an indicator showing consumers' perceived economic conditions. If the index is above 100, it means consumers are more optimistic than the long-term average (January 2003 to December 2019). Using the long-term average as the baseline value of 100, a value above 100 indicates optimism, while below 100 indicates pessimism.

The Consumer Sentiment Index fell to 92.4 in August last year but continued to rise from September to November. It dropped by 0.5 points in December but rebounded again in January.

A Bank of Korea official explained, "The economic-related index rose due to factors such as the signing of the US-China Phase One trade agreement, and the perception of household financial conditions also improved, leading to an increase in the Consumer Sentiment Index."

However, the survey period for the January Consumer Sentiment Index was from the 10th to the 17th of this month, so the impact of the novel coronavirus was not reflected at all. Accordingly, the Consumer Sentiment Index is expected to decline in February.

During the spread of MERS (Middle East Respiratory Syndrome) in 2015, the Consumer Sentiment Index plummeted from 104.8 in May 2015 to 97.7 in June.

In 2003, when SARS (Severe Acute Respiratory Syndrome) broke out, the Consumer Sentiment Index recorded 97 in the first quarter but dropped to 91 in the second quarter and remained around 91 until the third quarter. At that time, the Consumer Sentiment Index was compiled quarterly.

A Bank of Korea official forecasted, "If the novel coronavirus continues to worsen in this way, it is believed that next month's index will definitely be affected."

Looking at the detailed components of the overall January index, the Living Conditions Expectation CSI (97) and Household Income Expectation CSI (101) each rose by 3 points. The Current Living Conditions CSI (93) and Consumption Expenditure Expectation CSI (110) also increased by 1 point each.

The Current Economic Conditions CSI rose from 74 to 78, and the Future Economic Outlook CSI jumped from 82 to 87.

The Housing Price Expectation CSI recorded 116, down 9 points from the previous month. This reflects the impact of the government's housing market stabilization measures, with more consumers predicting a decline in housing prices. This is the first time the Housing Price Expectation CSI has fallen since March 2019.

The expected inflation rate, which indicates how much prices are expected to rise over the next year, rose by 0.1 percentage points to 1.8% compared to the previous month. The price perception, which reflects how much prices have risen over the past year, remained at 1.8%.

This content was produced with the assistance of AI translation services.