South Korea Consumer Sentiment Index Rises to 106.8 in July

South Korea's consumer sentiment index rose to 106.8 in July, up 0.2 points from the previous month, marking the third consecutive monthly improvement. The Bank of Korea attributed the increase to continued strong semiconductor-centered exports and investment, along with growing wage increase expectations. The Consumer Sentiment Index (CCSI) uses the long-term average from 2003-2025 as the baseline value of 100, with values above 100 indicating optimism compared to the long-term average and values below 100 indicating pessimism.

Consumer Sentiment Sub-Indices Show Mixed Results in July

The household income outlook CSI rose 1 point to 101, driven by wage increase expectations. The future economic outlook CSI remained unchanged at 92, a level above the long-term average of 86. The housing price outlook CSI increased 7 points to 127, influenced by continued rises in apartment sales and lease prices centered in Seoul and Gyeonggi regions. However, the current living conditions CSI fell 1 point due to persistent high inflation and stock price declines.

Lee Heung-hu, head of the Bank of Korea's Economic Sentiment Survey Team, stated: "Overall, the index has risen for three consecutive months due to strong semiconductor exports and wage increase expectations, exceeding the long-term average. Overall, optimistic perceptions continue."

Expected Inflation Rate Declines to 2.7% Amid Falling Oil Prices

The expected inflation rate for the next year fell 0.1 percentage point to 2.7% from the previous month. Lee explained: "Domestic oil prices have continued to decline, acting as a factor lowering inflation expectations. However, as Middle East tensions have recently worsened again, oil prices may rise and potentially stimulate inflation expectations again, so it needs to be monitored."

FAQ

What caused South Korea's consumer sentiment index to rise in July? The Bank of Korea attributed the 0.2-point increase to 106.8 to continued strong semiconductor-centered exports and investment, along with growing wage increase expectations.

Why did South Korea's expected inflation rate fall in July? The expected inflation rate for the next year declined 0.1 percentage point to 2.7% due to continued declines in domestic oil prices, according to the Bank of Korea's Economic Sentiment Survey Team.