Consumer sentiment has significantly rebounded, recovering to levels before the state of emergency. This is influenced by expectations that economic stimulus policies will be implemented following the new government's launch.
According to the results of the consumer trend survey released by the Bank of Korea on 27th, the Consumer Confidence Index (CCSI) for May rose to 101.8, an increase of 8.0 points from the previous month (93.8), returning to levels prior to the state of emergency. It is at the highest level in seven months since October last year (101.8), with the largest increase since October 2020 (+12.3 points).
Lee Hye-young, head of the Economic Psychology Survey Team at the Bank of Korea, noted, "Consumer sentiment has improved significantly as political uncertainty has somewhat eased and negative factors such as U.S. tariff policies have been alleviated."
The CCSI is an index calculated using six indicators: current living conditions, outlook for living conditions, outlook for household income, outlook for consumption expenditures, current economic judgment, and outlook for future economic conditions. A value above 100 indicates optimistic consumer sentiment compared to the long-term average (2003 to 2024), while a value below 100 indicates pessimistic sentiment.
All six indices that make up the CCSI increased from the previous month. Among them, the outlook for future economic conditions (91, +18 points) and current economic judgment (63, +11 points) rose significantly. The outlook for future economic conditions was boosted by expectations surrounding the new government's launch, while the current economic judgment saw a sharp increase following the supplementary budget's passage in the National Assembly and the postponement of the U.S. reciprocal tariff measures.
The housing price outlook index, which indicates expectations for housing prices a year from now, recorded 111 this month, rising 3 points from the previous month. This marks three consecutive months of increase and is the highest level in seven months since October last year (116). If this index is above 100, it means that there are more consumers expecting a rise in housing prices than those predicting a decline.
The expected inflation rate (2.6%), which indicates price expectations for the upcoming year, decreased by 0.2 percentage points from the previous month, driven by declines in prices for oil and agricultural products. The expected inflation rates for three years and five years from now are both 2.5%, down by 0.1 percentage points each from the previous month.