Europe Crisis Fails to Damp South Korean Consumer Confidence

South Korean consumer confidence rose to the highest level in 15 months as easing inflation helped to offset concern that Europe’s debt crisis will undermine growth.

The sentiment index was at 105 in May, the strongest since February 2011 and up from 104 in April, the Bank of Korea said in an e-mailed statement today. A reading above 100 indicates optimists outnumber pessimists.

South Korea’s won fell to the weakest level in more than seven months and government bonds rose yesterday amid doubts Europe will succeed in containing the sovereign-debt crisis as Greece teeters on the brink of an exit from the euro. Inflation moderated to a 21-month low of 2.5 percent in April and today’s report showed that expectations for price gains have declined.

The consumer confidence index is based on survey responses from 2,091 households in 56 cities. It was conducted by mail and telephone between May 11 and May 18. The expected inflation rate over the next year was 3.7 percent in May, slower than last month’s 3.8 percent, the report showed.

To contact the reporter on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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