Consumer sentiment rises for third straight month as inflation slows

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Consumer sentiment rises for third straight month as inflation slows

Published: 20 Feb. 2024, 15:32

JIN MIN-JI
[email protected]

Korea’s consumer sentiment rose for a third consecutive month in February as inflation continued to moderate and exports recovered. Consumers shop in a supermarket in Seoul on Feb. 12. [YONHAP]

Korea’s consumer sentiment rose for a third consecutive month in February as inflation continued to moderate and exports recovered.

The composite consumer sentiment index (CCSI) stood at 101.9 in February, up from 101.6 in the previous month, according to a Bank of Korea (BOK) poll released Tuesday. The figure stayed above 100 for two straight months.

A reading above 100 means optimists outnumber pessimists.

The survey was conducted from Feb. 5 through Feb. 14.

The February figure is its highest since August 2023 when the corresponding reading was 103.3.

The Korean central bank said consumer sentiment improved amid a slowdown in inflation, a rebound in exports and growing expectations of an end to the Fed's rate-hiking cycle.

Inflation expectations by consumers for the year ahead remained unchanged at 3 percent.

The figures are closely watched, as their upward movement could drive businesses to raise prices and employees to ask for pay raises, resulting in more upward pressure on inflation going forward.

Korea's inflation fell below 3 percent for the first time in six months in January, showing signs that inflationary pressure is easing.

Consumer prices, a key gauge of inflation, rose 2.8 percent on year last month, compared to a 3.2 percent increase a month earlier.

The Korean central bank said earlier that inflationary slowdown may be more gradual than expected down the road.

Last month, the bank held its key interest rate steady at 3.5 percent for the eighth straight time amid a slowdown in growth and still-high inflation.

The BOK delivered seven consecutive rate hikes between April 2022 and January 2023.

The bank's board is set to decide the target rate on Thursday.

BY JIN MIN-JI, YONHAP [[email protected]]