The Bank of Korea (BOK) announced today that the Korea Composite Consumer Sentiment Index (CCSI) for May 2023 has reached a one-year high of 98.0, surpassing analysts’ expectations. The index shows an improvement from April’s figure of 95.1, exceeding the consensus forecast of 93.4.
Despite the positive uptick, the CCSI has remained below the threshold of 100 for the 12th consecutive month, indicating an overall negative sentiment among consumers regarding the state of the economy. Nevertheless, the latest data reveals a growing number of consumers with a more positive outlook.
In terms of inflation expectations, consumers anticipate a slight decrease over the next 12 months, with the figure dropping to 3.5% from the previous month’s 3.7%. This marks a 12-month low in inflation expectations.
During a press conference, BOK officials highlighted that it is premature to conclude that inflation expectations have stabilized. The uncertainty surrounding factors such as the increase in public prices for goods and services, imposed by the state, continues to play a role in the market.
The index was compiled based on the results of a survey conducted from May 8 to May 15, prior to South Korea’s decision to raise electricity prices by 5.3%. This increase represents the second adjustment made this year.
As the Bank of Korea evaluates the impact of recent developments on consumer confidence, market analysts remain cautiously optimistic about the overall trajectory of the country’s economy.