South Korean Consumers More Optimistic as Recovery Accelerates
South Korean Consumers More Optimistic as Recovery Accelerates
(Bloomberg) -- South Korea’s consumer sentiment strengthened in April for a fourth straight month as the economic recovery powered ahead.
The Bank of Korea’s consumer sentiment index rose 1.7 points from March to 102.2, the highest since the pandemic started to hit confidence in early 2020, according to a statement Wednesday. A reading above 100 indicates optimism outweighs pessimism.
The data come after Korea posted stronger-than-expected growth in the first quarter, which put the economy among the few globally to surpass its pre-pandemic size. The central bank attributed the rise in sentiment to recovery expectations on export growth, vaccinations and better jobs data.
Among the components of the headline sentiment index, households’ assessment of current living standards contributed most to the rise, followed by their view on the economy and the income outlook. A sub-index on households’ consumption outlook declined.
Economists have revised up their economic outlooks for the year in light of the faster first-quarter growth. JPMorgan Chase Bank now sees the economy growing 4.6%, versus an earlier 4.1% forecast, while Citibank Korea now expects 3.6% expansion, up from 3.3%.
The stronger confidence supports the view that South Korea’s recovery momentum remains intact into the second quarter, but that optimism could be tempered if the pandemic worsens. The country’s daily Covid infections have ranged between 500 to 700 in April, leading the government to keep social distancing rules tight.
Households’ inflation expectations for the next 12 months were unchanged at 2.1%. The survey of 2,369 households was taken between April 12-19.
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