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Koreans show restored optimism in economy

Apr 26,2017
Consumer confidence in the Korean economy turned positive for the first time in six months in April as various economic indicators, including exports, have shown improvement recently.

According to Bank of Korea on Tuesday, the composite consumer sentiment index stood at 101.2 this month, up 4.5 points from the previous month. The figure continues a streak of month-on-month improvement that started in February.

A reading above 100 points indicates a majority of survey participants maintain a positive outlook on the national economy, while a reading below 100 suggests pessimists outnumber optimists. The 101.2 points recorded in April was the first time the figure surpassed 100 since October.

“Consumer sentiment went down at the end of last year due to political uncertainties both within the country and from abroad, including the new administration in the United States,” said Park Sang-woo, a director at the central bank.

“However, it appears that many people are gaining more confidence about the economy as some uncertainties are disappearing ahead of the new administration in Korea and as the country’s exports continue to be improving.”

Korean exports last month rose 13.7 percent year on year to $48.9 billion. It was the fifth straight month of increases. The amount of exported goods in March was also the highest since December 2014, when it reached $49.5 billion.

Earlier this month, the central bank raised its GDP growth forecast for this year from 2.5 percent to 2.6 percent. This was the first time in three years that the bank raised its outlook from a previous projection.

The Bank of Korea’s survey showed sentiment on household finances was pessimistic, matching the previous month’s 89. In terms of future prospects for household finances, the index also remained unchanged at 93.

Future prospects for the labor market, in other words, how confident people feel about finding a job, rose from 76 in March to 86 this month.

The majority of Koreans considered public utility charges one of the biggest factors that will have an impact on consumer prices in the future. In the survey, 51.4 percent of respondents said public utility charges would raise consumer prices, and another 44.8 percent said manufactured goods were one of the biggest factors that will raise inflation in Korea. Multiple answers were allowed.

The Bank of Korea’s survey included 2,200 households.


BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]