South Korea’s consumer sentiment rises to seven-year high ahead of BOK
The survey-based index remains well above the neutral threshold of 100, signalling continued optimism
[SEOUL] South Korea’s consumer confidence rose to the highest in seven years as surging stock prices and resilient exports offset uncertainties surrounding US tariffs, giving the central bank added incentive to hold policy steady this week.
The composite consumer sentiment index climbed 0.6 point to 111.4 in August, the highest reading since January 2018, according to a Bank of Korea (BOK) report released on Tuesday (Aug 26). The survey-based index remains well above the neutral threshold of 100, signalling continued optimism.
Confidence has now increased for a fifth consecutive month as the nation continues to recover from political turmoil at the start of the year. While the return to stability has helped fuel the gains in equities, expectations that the US Federal Reserve is inching toward a rate cut have added to the momentum, with the Kospi Index hitting a four-year high on Jul 31.
South Korea’s exports climbed for a second straight month in July, driven by strong semiconductor and solid vehicle sales, and apparent front-loading by companies aiming to get ahead of an increase in US tariffs.
The consumer confidence report is among the last datasets available before the BOK sets policy on Thursday. Economists largely expect authorities to hold the benchmark rate steady as they weigh the possibility that a frothy housing market could fuel household debt.
A sub-index tracking housing price expectations inched two points higher to 111, while the household debt outlook edged slightly higher to 97.
The BOK paused its easing cycle for a second month in July, citing persistent imbalances in the property market, particularly in the Seoul metropolitan area.
The data were released hours after South Korean President Lee Jae Myung met with US President Donald Trump in Washington for the first time. BLOOMBERG
Share with us your feedback on BT's products and services
