'Consumer Sentiment' Declines After 4 Months... Strengthened Quarantine Measures as a Variable (Comprehensive)

Housing Price Outlook Declines for Four Consecutive Months... "House Prices Are Falling"
Quarantine Measures and Inflation Trends Remain Variables

[Asia Economy Reporter Jang Sehee] Consumer sentiment, which had shown signs of gradual recovery, declined again after four months. This is interpreted as a deterioration in economic perception due to the strengthening of social distancing measures amid the resurgence of COVID-19. Opinions suggest that consumer sentiment trends will also change depending on the government's future quarantine measures.

According to the 'December Consumer Sentiment Survey Results' announced by the Bank of Korea on the 28th, the Consumer Confidence Index (CCSI), which comprehensively reflects economic life sentiment, was 103.9 this month, down 3.7 points from November. After rising to 103.8 in September compared to the previous month, it increased for three consecutive months in October (106.8) and November (107.6), but turned downward this month. However, the decline was smaller compared to the first wave (-31.5 points) and the second wave (-8.3 points) of the pandemic.

Among the six components that make up the Consumer Confidence Index, the largest declines were seen in employment opportunity outlook (-9 points), future economic outlook (-8 points), and consumption expenditure outlook (-5 points).

Hwang Heejin, head of the Bank of Korea's Statistics Survey Team, explained, "The consumption expenditure outlook fell sharply, mainly in travel, dining out, and entertainment culture, due to the increase in COVID-19 cases," adding, "The slight decline in the living condition index also reflects the impact of rising prices." It can be interpreted that overall consumer sentiment worsened due to reduced face-to-face consumption caused by strengthened social distancing and rising prices.

The housing price outlook (107) declined for the fourth consecutive month amid a slowdown in apartment sale price increases, rising interest rates, and household loan regulations. The expected inflation rate, which reflects consumers' anticipated price increase over the next year, also fell by 0.1 percentage points to 2.6%. However, the interest rate level outlook (137) remained at a high level, influenced by expectations of further base rate hikes and inflation concerns.

Regarding future consumer sentiment trends, Team Leader Hwang stated, "It may be affected depending on whether the authorities implement quarantine measures," and added, "Prices also need to be continuously monitored."

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