Expected Inflation Exceeds 3%, Highest in 9 Years... Housing Price Outlook Index Also Soars

Interest Rate Level Outlook Hits Record High... Consumer Sentiment Index Rises by 0.6 Points

[Asia Economy Reporter Seo So-jeong] The expected inflation rate for the next year, which reflects consumers' anticipated consumer price increase, has surpassed 3%, reaching the highest level in nine years. The interest rate outlook also showed an all-time high, and the housing price expectation index jumped by 10 points in just one month due to expectations of real estate regulation easing under the new government.

According to the "April Consumer Survey Results" released by the Bank of Korea on the 27th, the expected inflation rate this month rose by 0.2 percentage points from the previous month to 3.1%. This is the highest figure in nine years since April 2013 (3.1%).

The price perception index, which reflects consumers' judgment on the consumer price increase over the past year, also recorded 3.2%, the highest since April 2013. It rose by 0.3 percentage points compared to the previous month. Hwang Hee-jin, head of the Bank of Korea's statistics survey team, explained, "Consumers seem to have a high expectation of inflation due to frequently encountering news about supply-side inflation factors such as supply chain disruptions caused by the prolonged Ukraine crisis." He added, "There are talks about public utility fee measures, but it is uncertain whether such news will immediately affect prices, and there are also external factors. Therefore, I think inflationary concerns will continue to influence the expected inflation rate for the time being."

The interest rate outlook index (141) surged by 5 points from the previous month to reach an all-time high due to rising market interest rates and inflation concerns. The housing price expectation index (114) rose by 10 points in one month amid a slowdown in the decline of apartment sale prices and growing expectations for real estate regulation easing and development. Team leader Hwang explained, "Although actual housing prices vary by region with some rising and others falling, the expectation index for housing prices increased significantly as people's expectations for easing reconstruction and redevelopment regulations grew."

Meanwhile, the Consumer Confidence Index (CCSI) for this month recorded 103.8, up 0.6 points from the previous month. The consumer confidence index has fluctuated depending on the increase in COVID-19 cases and the easing of quarantine measures but has continued to rise for two consecutive months. The consumer confidence index is based on a standard value of 100; values above 100 indicate optimism compared to the long-term average, while values below 100 indicate pessimism. Compared to March, among the six indices that make up the consumer confidence index, the current economic situation (74) rose by 3 points, and current living conditions (92) increased by 2 points. Household income outlook (99), consumption expenditure outlook (114), and future economic outlook (87) remained at similar levels. The living condition outlook (95) fell by 1 point.

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