Daily COVID-19 Cases Near 8,000... 'Consumer Sentiment' Declines for the First Time in 4 Months

'December Consumer Sentiment Survey Results'

[Asia Economy Reporter Jang Sehee] Consumer sentiment, which had shown signs of gradual recovery, has declined again after four months. This is interpreted as a deterioration in economic perception due to the escalation of social distancing measures amid the resurgence of COVID-19.

According to the 'December Consumer Sentiment Survey Results' released by the Bank of Korea on the 28th, the Consumer Confidence Index (CCSI), which comprehensively reflects economic life sentiment, stood at 103.9, down 3.7 points from November.

However, the decline was smaller compared to the first wave (-31.5 points) and the second wave (-8.3 points) of the pandemic.

After falling from 103.2 in July to 102.5 in August this year, the index rose slightly for three consecutive months in September (103.8), October (106.8), and November (107.6), but then turned downward again.

The Consumer Confidence Index is calculated by summing six indices including current living conditions, consumption expenditure outlook, and current economic judgment. A value below 100 means that many people expect the economic situation to worsen, while a value above 100 indicates the opposite.

Hwang Heejin, head of the Bank of Korea's Statistics Survey Team, analyzed, "In December, consumer sentiment declined as COVID-19 cases increased," adding, "Regarding consumption expenditure, there was a significant drop mainly in areas affected by quarantine measures such as travel, dining out, and entertainment/culture."

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Due to the intensification of the COVID-19 resurgence, all six component indices also declined.

The consumption expenditure outlook index dropped 5 points from 115 last month to 110. The household income outlook index recorded 100, down 1 point from the previous month.

The current living conditions index fell from 92 to 91, and the living conditions outlook index decreased from 97 to 96, both down by 1 point from the previous month.

The current economic judgment index and the future economic outlook index also declined by 2 points and 8 points to 79 and 88, respectively.

The employment opportunity outlook index dropped 9 points from 98 to 89, indicating an increase in consumers who view employment prospects pessimistically compared to the previous month. This reflects a contraction in expectations for economic recovery.

The price level outlook index fell by 1 point to 151 compared to the previous month.

The interest rate outlook index recorded 137, maintaining a high level. This is analyzed as being influenced by expectations of further base rate hikes and inflation concerns.

Housing price outlook declined for the fourth consecutive month due to the slowdown in apartment sale price increases, rising interest rates, and household loan regulations.

The expected inflation rate for the next year, which consumers anticipate, also fell by 0.1 percentage points to 2.6%.

Team leader Hwang stated regarding future consumer sentiment outlook, "While major macro indicators such as exports and employment are not bad, consumer sentiment is declining," adding, "Future consumer sentiment may be influenced by whether authorities implement quarantine measures." He also expressed a cautious stance, saying, "Prices may either fall or rise depending on future measures, so continuous monitoring is necessary."

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