Consumer confidence in South Korea turned positive for the first time in March since the outbreak of Covid-19 in February last year amid hopes of normalization of lives through rollout of vaccines.

The composite consumer sentiment index (CCSI) reached 100.5 in March, up 3.1 points from a month earlier, showed the Bank of Korea data on Friday. It is the first time for the index to go above 100 since January last year or before the Covid-19 crisis began. It is the third month in a row for the index to rise.

A reading above 100 means people are optimistic than pessimistic, and vice versa for a reading below 100.

The central bank projected the CCSI would continue to improve as people plan to increase their spending when the social restriction measures ease.

Five out of six major indicators that make up the CCSI are all near the long-term average, according to the bank.

The index showing consumer views on the current state of living climbed 2 points to 89. That for future living conditions gained 1 point to 95.

Consumer expectation for future spending rose 3 points to 107, nearing to the pre-pandemic level of 110 recorded in January last year.

The index measuring consumer confidence in current economic conditions compared with six months ago jumped 9 points to 72. The index for the economic outlook six months from now rose 3 points to 93.

Outlook for household income, however, was the same as the previous month at 96.

Housing price forecast fell 5 points on month and extended the losing streak to the third month amid the government’s ongoing policies to cool down the sizzling property market.

Household sentiment on both savings and debts grew.

Assessment on current household saving condition added 1 point and for debt condition 2 points. Expectation for future savings gained 1 point. Household debt outlook was the same as a month earlier.

Confidence about future job opportunities improved 4 points. But anticipation for wage increase stayed unchanged.

Consumer outlook on interest rate increase jumped 10 points, the fastest since December 2016.

Consumers’ perceived inflation over the past one year was 2.1 percent, up 0.1 percentage point from a month ago. Expected inflation for the following year was up 0.1 percentage point to 2.1 percent.

The central bank’s survey on consumer sentiment was taken from March 9 to 16.

By Cho Jeehyun

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