[Photo by Yonhap]
The degree of pessimism among South Korean consumers eased for the second straight month in June as the stock market rallied and business activities normalized on the back of government stimulus actions and receding COVID-19 numbers.
The composite consumer sentiment index rose 4.2 points on month to 81.8 in June, the Bank of Korea data showed Friday.
The index reversed direction last month after hitting an 11-year low of 70.8 in March at the height of the outbreak. It had hovered above the 100 threshold from November to January until hopes for an economic recovery were dashed by the coronavirus.
A reading of below 100 means more people are pessimistic than optimistic about the economy.
The latest data was collected in the first 17 days of June when the pace of infections had slowed down. Korea saw a brief uptick in COVID-19 cases in the following weekend, adding 67 new infections last Saturday, the biggest daily jump in more than three weeks. By Thursday, the number of new infections had slowed again to 28.
“Consumer sentiment has improved thanks to containment of the virus, aggressive stimulus measures and rising stock market,” said Lee Hye-lim, the BOK’s statistics research team manager.
The benchmark Kospi has recovered to pre-COVID-19 levels. In the June 1-17 period, the index averaged 2,140.0, up from the March lows of 1,500 and higher than the previous month’s average of 1,965.2.
In May, the government handed out coronavirus relief checks of up to 1 million won ($833) to each household in the country.
All six major sub-indexes on economic and household financial status improved from a month earlier.
The index measuring consumer confidence in current economic conditions compared with six months ago jumped 8 points to 44. The index on the economic outlook six months from now also rose 3 points to 70.
Consumer views on the current state of living improved by 5 points, bumping up the headline index by the most at 1.3 points. Views on future living conditions gained 2 points.
Expectations for household income edged up 1 point to 88, and future spending 2 points to 93.
Views on inflation over the past year remained the same at 1.7 percent, the lowest since January 2013. Expected inflation for the following year was also unchanged at 1.6 percent, the lowest since February 2002.
By Kim Hyo-jin
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