Korean consumer confidence improved for the first time in four months in September, but whether it is sustainable remains uncertain as the expected inflation hit all time low to reflect doubts about cost push prospects.
The composite consumer sentiment index (CCSI) for September gained 4.4 points to 96.9 from the previous month, according to data released by the Bank of Korea on Thursday. A reading above 100, the average value of 2003-2018, means there are more optimists than pessimists about the economy and vice versa for below 100.
Consumer sentiment, still hovering below the 100 threshold, improved on renewed hopes for easing in trade tensions between the U.S. and China, revived stock and housing market.
All six major indicators that make up the CCSI were up from a month ago.
Consumer assessment on current economic conditions added 5 points to 68, with outlook on future economic conditions gaining 9 points at 75. Consumer sentiment about current livelihood grew 2 points to 92, and future livelihood 3 points to 92.
The outlook for future household income improved 3 points to 97, that for future spending also up 1 point to 106.
Consumers also turned slightly positive about job opportunities with the related index up 5 points to 79. The outlook for interest rate remained unchanged at 85. The index reflecting housing price outlook stood at 109, up 2 points on month.
Their view on inflation over the past year, however, was down 0.2 percentage point at 1.9 percent, the lowest since the data has been traced from January 2013.
The country’s benchmark consumer price index (CPI) in August retreated 0.038 percent to 104.81 from a year ago, the first time the country has experience negative inflation since data was available in 1965. The figure stayed in zero territory since January, the longest period since February-November 2015.
Projection for the inflation rate in the coming year also remained subdued with the related index down 0.2 percentage point at 1.8 percent, the worst since such data was first collected in February 2002.
By Kim Yeon-joo and Lee Ha-yeon
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