Consumer sentiment hits 4-year high on political stability, planned stimulus

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Consumer sentiment hits 4-year high on political stability, planned stimulus

Published: 24 Jun. 2025, 14:54 Updated: 24 Jun. 2025, 22:30

Audio report: written by reporters, read by AI

A shopper looks at vegetables at a supermarket in Seoul on June 22. [NEWS1]

Consumer confidence in Korea improved for a third consecutive month in June, reaching its most optimistic level in four years, according to data released by the Bank of Korea on Tuesday. Analysts attribute the uptick to expectations for the new administration and the government’s planned second supplementary budget.

The Composite Consumer Sentiment Index (CCSI) rose to 108.7 in June, up 6.9 points from 101.8 in May. This marks the highest level since June 2021, when the index stood at 111.1.

The CCSI is calculated based on six components — current living conditions, expected living conditions, expected household income, expected consumer spending, current economic conditions and future economic outlook. A reading above 100 indicates optimism compared to the long-term average, while a reading below 100 signals pessimism.

All six components improved this month. In particular, the index for the future economic outlook jumped 16 points to 107, while the current economic conditions index climbed 11 points to 74.

“Consumer sentiment has recovered due to a combination of reduced political uncertainty, expectations for the new government’s policies and the planned supplementary budget,” said Bank of Korea official Lee Hye-young.

“However, the budget still awaits parliamentary approval, and uncertainties such as the Middle East conflict and the end of U.S. reciprocal tariff exemptions remain, so the situation warrants further monitoring,” she added.

Expectations for the housing market also rose. The housing price outlook index climbed 9 points to 120 this month, its highest level since October 2021, when it reached 125. It also marked the largest monthly increase since March 2023.

“Given that the long-term average of the housing price outlook index is around 107, current sentiment is relatively high,” Lee noted.

In contrast, expectations for interest rates fell. The interest rate outlook index dropped 6 points to 87 — the lowest since June 2020, when it hit 82. Consumer expectations for inflation over the next year also declined, with the expected inflation rate falling 0.2 percentage points from the previous month to 2.4 percent.

The survey was conducted between June 10 and 17, targeting 2,500 households nationwide.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY JEONG JAE-HONG [[email protected]]