August Consumer Sentiment Rises for 4th Consecutive Month... "Second Wave of COVID-19 Not Reflected, September Uncertain"

Bank of Korea 'August 2020 Consumer Sentiment Survey'
Housing Price Outlook CSI Remains at Last Month's Level

[Asia Economy Reporter Eunbyeol Kim] The Consumer Confidence Index (CCSI) for August rose for the fourth consecutive month, reflecting the public's optimistic view of economic recovery. However, since the August survey was conducted before the implementation of the social distancing level 2 measures due to the second wave of COVID-19, it is difficult to guarantee that consumer sentiment will continue to improve in September.

According to the 'August 2020 Consumer Survey' released by the Bank of Korea on the 25th, this month's CCSI was recorded at 88.2, up 4.0 points from July's 84.2. The increase in CCSI was also larger than last month's (+2.4 points).

The CCSI is an indicator calculated using six of the 15 indices that make up the Consumer Sentiment Index (CSI): current living conditions, living conditions outlook, household income outlook, consumption expenditure outlook, current economic conditions, and future economic outlook. A value below 100 indicates pessimism in consumer sentiment compared to the long-term average (2003?2019). Although the absolute CCSI remains below 100 and thus pessimistic, consumer sentiment has improved for four consecutive months.

Hwang Hee-jin, head of the Bank of Korea's Statistics Survey Team, explained, "The CCSI rose compared to the previous month as optimism about the economy spread, partly due to the OECD's upward revision of Korea's economic outlook." However, she added, "Due to the survey period (August 10?14), the impact of the second wave of COVID-19 was not reflected, so it is difficult to predict consumer sentiment for September."

Among the Consumer Sentiment Index (CSI) components that make up the CCSI, the current living conditions CSI remained at 85, the same as the previous month, while the living conditions outlook CSI rose 2 points to 89. The household income outlook CSI and consumption expenditure outlook CSI also increased by 2 points and 4 points respectively, reaching 92 and 99. The current economic conditions CSI (54) and future economic outlook CSI (75) both rose by 5 points compared to the previous month. As negative perceptions of the economy eased, the employment opportunity outlook CSI rose significantly by 7 points to 72.

The housing price outlook CSI, which had been rising sharply due to the surge in nationwide apartment sale prices, remained at the same level as last month (125), influenced by the government's housing market stabilization measures. The price level outlook CSI rose 4 points to 139.

Household savings and debt conditions also improved. The current household savings CSI (90) and household savings outlook CSI (92) rose by 2 points and 1 point respectively compared to the previous month. The current household debt CSI (101) and household debt outlook CSI (99) both fell by 1 point.

The perceived inflation rate over the past year was 1.8%, up 0.1 percentage points from the previous month. The expected inflation rate, which reflects the forecasted consumer price increase over the next year, also rose by 0.1 percentage points to 1.8%.

Regarding major items expected to influence consumer prices over the next year, 49.7% of respondents cited agricultural, livestock, and fishery products. This was followed by rent (47.5%) and public utility charges (28.0%). Compared to the previous month, the proportion citing agricultural, livestock, and fishery products (+17.7 percentage points) and rent (+6.0 percentage points) increased.

This survey was conducted from August 10 to 14, targeting 2,500 urban households nationwide. A total of 2,358 households responded.

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