South Korea’s consumer confidence improved in May after sinking to the lowest level since the 2008 financial crisis in the previous month on aggressive virus relief actions that included cash handouts to every household.

The composite consumer sentiment index rose to 77.6 in May from 70.8 a month earlier, turning north for the first time in three months, the Bank of Korea data showed Tuesday.

The index, however, remains far below 100, meaning that there are more pessimists than optimists about the economy.

“The growth in COVID-19 infection cases has slowed and social distancing restrictions eased, normalizing economic activities to some extent,” said the central bank. “Expectations that the government’s aggressive fiscal measures including relief packages would have a positive impact on the economy seemed to be reflected in the latest consumer sentiment.”

The number of daily infection cases in the country fell to below 20 last month from hundreds in early March. This has allowed the government to relax social distancing rules. Also, the government had given out disaster relief checks from 400,000 won ($322) to 1 million won to every household.

All six major sub-indexes on economic and household financial status improved in May from a month earlier.

The index showing consumers’ confidence in current economic conditions gained 5 points to 36. The index on future economic outlook rose 8 points to 67.

Consumers’ views on the current state of living improved 2 points to 79, and on future living conditions 6 points to 85.

Expectations for household income were up 4 points to 87, and for future spending 4 points to 91.

Their view on inflation over the past year fell 0.1 percentage point to 1.7 percent. Inflation expectations over the next year were 1.6 percent, down 0.1 percentage point from a month earlier. They are the lowest since January 2013 and February 2002, respectively.

The BOK’s survey on consumer sentiment was taken on 2,370 households from May 11 to May 18.

By Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]