Korea's News Sentiment Index Also Declines Amid COVID-19 Resurgence
COVID-19 4th Wave and Social Distancing Level 4 Impact
Consumer and Business Sentiments Expected to Decline
[Asia Economy Reporter Eunbyeol Kim] As the daily number of COVID-19 cases in South Korea continues to break records, economic sentiment indicators that seemed to be recovering are sharply declining.
According to the Bank of Korea on the 14th, the News Sentiment Index (NSI), compiled using artificial intelligence (AI), has shown a steep downward trend since the beginning of this month. In June, the NSI rose due to accelerated COVID-19 vaccinations and growing expectations for economic recovery, but the situation reversed in July.
The NSI recorded 132.42 on the 7th, when daily COVID-19 cases exceeded 1,000, and rose to 133.32 on the 8th, but then dropped to around 129 and 127, falling further to 125.59 on the 12th. This level is similar to that during the third wave of COVID-19 spread in late November to early December last year. The sharp increase in daily cases and the government's decision to raise social distancing measures to level 4 in the Seoul metropolitan area are believed to have contributed to the NSI's decline.
The NSI is the first statistic published by the Bank of Korea using AI techniques. It randomly extracts about 10,000 sentences from 50 media outlets and classifies them into positive, negative, or neutral sentiments through machine learning, then indexes the results. An index above 100 indicates that positive sentences outnumber negative ones in news articles.
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Although the index remains above 100, indicating a predominance of positive sentiment, the decline observed in July suggests that if COVID-19 is not contained, other economic sentiment indicators may also fall. The NSI has the advantage of being compiled faster than other indices published by the Bank of Korea, such as the Consumer Confidence Index (CCSI) and the Business Survey Index (BSI), providing timely insights. Based on the NSI trend, it is likely that the CCSI and BSI have also declined this month.
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