The consumer sentiment index rose significantly for two consecutive months, reaching its highest level in four years. This was influenced by growing expectations regarding the new government’s launch and the supplementary budget. Recently, the general public's expectations for rising home prices have also reached their highest point in three years and eight months, driven by soaring home prices centered around Seoul.
According to the 'June Consumer Trends Survey' released by the Bank of Korea on the 24th, the consumer sentiment index (CCSI) for this month is 108.7, up 6.9 points from May (101.8). This marks the highest level since June 2021 (111.1).
CCSI is a sentiment indicator calculated using six key indices from the Consumer Trends Index (CSI). A value greater than 100 indicates optimism compared to the long-term average, while a value less than 100 indicates pessimism. The CCSI had plunged 12.5 points due to the emergency martial law in December of last year but has risen for three consecutive months starting from April (93.8).
Among the components that constitute the CCSI, the economic-related index saw a significant increase. The current economic judgment rose from 63 last month to 74 this month, while the future economic outlook jumped from 91 to 107. Lee Hye-young, head of the Economic Psychological Research Team at the Bank of Korea's Economic Statistics Division, noted, 'It seems that the resolution of political uncertainties, the preparation of the second supplementary budget, and expectations regarding the new government's economic policies have played a role.'
The housing price outlook index recorded 120, an increase of 9 points. This is the highest level in three years and eight months since October 2021 (125). The scale of increase is also the largest since March 2023 (+9 points). When this index exceeds 100, it indicates that a larger proportion of consumers expect rising home prices in a year; if it is below 100, it suggests that more people anticipate falling home prices.
Recently, as apartment sale prices in Seoul and some areas of the metropolitan area have surged, expectations for rising dwelling prices have increased. According to the Bank of Korea, the housing price outlook index is heavily influenced by the real estate market at the time of the survey.
The expected inflation rate, which is the projected consumer price increase rate for the next year, stands at 2.4%, a decrease of 0.2 percentage points from the previous month. This is attributed to the slowdown in consumer price growth due to declines in agricultural and petroleum prices, coupled with the continuation of the government's price stability policy.