KB News Desk
Korea’s consumer sentiment improved to the highest in more than two years in July amid an extended recovery in exports and hopes for monetary easing, a central bank poll showed Wednesday.
The composite consumer sentiment index stood at 103.6 this month, up from the previous month’s 100.9, the highest since April 2022, according to the survey conducted by the Bank of Korea (BOK).
A reading above 100 means optimists outnumber pessimists.
The central bank said consumer sentiment improved this month amid a continued recovery in exports and growing hopes for rate cuts by the central bank.
Inflation expectations fell this month compared with the previous month.
This month, ordinary people expect consumer prices to rise 2.9 percent for the year ahead, compared with the previous month’s 3 percent.
The reading marks the lowest since March 2022, when the comparable figure was 2.9 percent, according to the BOK.
The figures are closely watched, as their upward move could cause businesses to raise prices and people to ask for pay raises, thereby resulting in more upward pressure on inflation going forward.
Korea’s consumer prices slowed to an 11-month low of 2.4 percent in June, from a 2.7 percent on-year rise a month earlier.
It was the third consecutive month that the prices decelerated and stayed below 3 percent, and June’s figure marked the lowest level since July 2023, when consumer prices grew 2.4 percent.
Earlier this month, the country’s central bank froze its key rate for the 12th straight session at 3.5 percent amid moderating inflation and high household debts.
The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.
