South Korea’s Consumer Confidence Rebounds From 11-Year Low
The reading jumped the most in three years but stayed well below 100, meaning pessimists still far outnumber optimists.
(Bloomberg) -- South Korea’s consumer confidence jumped in May from the lowest level since the global financial crisis as progress in curbing the coronavirus outbreak eased concern over the economy somewhat.
The consumer sentiment index rose to 77.6 this month from 70.8 in April, the Bank of Korea said in a statement Tuesday. The reading jumped the most in three years but stayed well below 100, meaning pessimists still far outnumber optimists.
How the BOK’s board interprets the rebound in sentiment may play a decisive role in its policy decision, when it meets Thursday to review rates. Most analysts so far expect a 25-basis-point cut to 0.5%, but some forecast the BOK will stand pat after taking unprecedented action since the outbreak.
Household perceptions of the economy and personal finances improved due to the slowdown in Covid-19 cases, the central bank said in a statement. Government handouts made this month to millions of families also appear to have helped the index rise, it said separately.
South Korea has seen its daily virus caseload dwindle to dozens, or single digits, last month after a surge of hundreds in February. This has led the government to relax its social distancing rules, allowing freer activity and public gatherings. Still, caution remains high as a recent spike in cases tied to nightclubs raised alarms of how easily the outbreak can be reignited.
The BOK’s report showed sub-indexes on households’ outlook on the overall economy and their state of living improving the most. Inflation expectations over the next year fell 0.1 percentage point to 1.6%.
The BOK’s survey of 2,370 households was taken between May 11 and 18.
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