Consumer confidence reaches highest level since Nov. 1998

Korea's consumer confidence rebounded in June to reach its highest level since November 1998, thanks to an increase in the number of consumers believing that the economy will continue to improve in the future, the National Statistical Office (NSO) said yesterday.
The consumer expectation index, a barometer of household spending in the coming six months, rose to 110.6 in June from 109.1 in May. The index registered 109.4 in April, 109.7 in March, 107.7 in February, 106.7 in January, and 100.9 in December last year.

The May figure is the highest since the statistical office began to compile such data in 1988.

An index above 100 indicates that the number of consumers planning to increase spending in the next six months is larger than that planning to decrease it.

"The confidence index is likely to remain at the current level of 110 in coming months," said Jeon Shin-ae, director of the Statistics Analysis Division at the NSO. "I do not see any signs of overheating in consumer confidence because the index is very unlikely to rise in the future."

The sub-index for the economic outlook in the next six months rose to 122.7 in June from 118.8 in May, meaning that the proportion of people who think the economy will improve is rising.

The sub-index of future spending, a barometer of consumer spending in the next six months, also rose to 110.5 in June from 109.9 in May, while the sub-index on spending on durable goods such as furniture, electric appliances and cars fell to 98.7 from 99.2

A figure below 100 means that people are not ready to spend more because they are still uncertain about the economic outlook, said the NSO official.

Meanwhile, the consumer evaluation index, measuring households' current consumer sentiment, rose for the eighth straight month to 108.1 last month from 107.6 in May.

An index above 100 means that a greater number of people feel better about their financial situation as compared with the previous six months.

With respect to household savings, 13.3 percent of those surveyed said their savings increased from the preceding six months, down from 14.2 percent the previous month, while 14.6 percent said their debts increased, up from 14.1 percent.

The remaining 72.2 percent said their savings remained about the same as their debts, up 0.4 percent.

In addition, 23.9 percent of those surveyed said their household income rose from six months ago, up from 22.8 percent, while 18.5 percent said their income dropped, up from 18.5 percent. The remaining 57.7 percent said their household income remained about the same, up from 56.2 percent.

The NSO's indexes are based on face-to-face interviews with married people over the age of 20 in 2,000 households nationwide.