Korea Consumer Confidence Rebounds to Near Pre-Scandal LevelBy
Central bank consumer sentiment index rises to 101.2 from 96.7
Improving exports, hope for new policies seen driving rise
Consumer confidence in South Korea rose by the most since 2013 as data suggested the economy is recovering and the nation began to move on from the impeachment of the president.
The Bank of Korea’s monthly consumer sentiment index rose to 101.2 in April from 96.7 the previous month, indicating rising optimism, data released Tuesday show. The gauge is now close to the level seen before a political scandal erupted in late 2016, engulfing then-President Park Geun-hye and some of the nation’s biggest companies.
After months of uncertainty, Park was impeached and jailed on bribery charges. Now Korea is set to elect a new president on May 9. Leading candidates are advocating for a reform of the family-led chaebol conglomerate system, more jobs for young people, and strengthened scrutiny against high-level public corruption.
“The recent exports recovery and expectations for the new government’s policies contributed to the rise in the consumer sentiment index,” said Ju Soung-jeh, an economist at the central bank’s economics statistics department.
The index was determined by surveying 2,031 households from April 11-18 on their views about subjects including income, spending and economic outlook. A reading above 100 indicates people are more optimistic about the economy than the average seen from 2003 to 2016. The amount of improvement was especially high for the sub-index on economic outlook, the statement showed.
Korea’s exports are set to increase for a sixth straight month in April, prompting the central bank and state Korea Development Institute to raise their growth forecasts for 2017.
While leading presidential candidate Moon Jae-in has pledged to implement a 10 trillion won extra budget if he is elected, Finance Minister Yoo Il-ho told reporters over the weekend that fiscal stimulus may not be necessary because data showed the economy improving.
Yoo said in a meeting with Michael Corbat, chief executive of Citigroup Inc., that Korea’s economy is showing stable growth but uncertainty over U.S. policies, trade issues with China and geopolitical tensions remain risks, according to a ministry statement on Tuesday.
Households’ inflation expectations over the next 12 months were unchanged at 2.6 percent, the BOK’s statement show.