Consumer sentiment rises at sharpest pace in 1 year in May: BOK
Seoul, May 22
Consumer sentiment rose at the fastest pace in about a year in May, driven by robust semiconductor exports and the stock market rally, the central bank said on Friday.
The composite consumer sentiment index (CCSI) stood at 106.1 this month, up 6.9 points from April and surpassing the 100-point mark for the first time in two months, according to a survey by the Bank of Korea (BOK), reports Yonhap news agency.
The reading had fallen for two straight months in March and April.
The latest figure also marked the sharpest on-month increase since June last year, when the index rose by the same margin of 6.9 percent.
A reading above 100 indicates that optimists outnumber pessimists, while a figure below 100 suggests the opposite.
The subindex for people's assessment of current economic conditions came in at 83 in May, up 15 points from a month earlier. The increase is also the largest on-month gain since October 2020.
The index for people's outlook for future economic conditions rose by 14 points to 93 over the same period, backed by South Korea's first-quarter gross domestic product (GDP) growth of 1.7 percent, the sharpest in more than five years.
"Optimism was supported by strong semiconductor shipments, better-than-expected first-quarter GDP growth and upward revisions to economic projections by major institutions, while the stock market rally also boosted sentiment," a BOK official said.
South Korea's exports expanded 48 percent on-year to US$85.9 billion last month, marking the second-highest monthly figure following March's $86.6 billion, with chip exports spiking 173.5 percent.
The export boom driven by semiconductors also lifted the stock market, with the benchmark Korea Composite Stock Price Index (KOSPI) climbing from the 6,900-point range at the beginning of May to above 7,900 in mid-May.
The latest monthly BOK index is based on a survey of 2,253 households throughout the country conducted from May 8-15.
— IANS
Reader Comments
Interesting how semiconductor exports are lifting Korea's entire economy. Meanwhile, we're still importing chips heavily for our electronics and auto sectors. Need to ramp up domestic production under the PLI scheme. Still, a 6.9 point jump in one month is impressive. 👏
South Korea's export numbers (48% growth, chips up 173%!) are mind-boggling. India's services sector is strong but our manufacturing lag. Modi government should study their strategy – maybe more Korean-style chaebol support for our tech companies? And KOSPI at 7900? Our Sensex at 75k is also doing well but different league.
I'm happy for Korea's bounce-back but let's keep perspective: this is a survey of 2,253 households – not necessarily representative of all citizens. And while chip exports boom, common Koreans face high housing costs and youth unemployment. Similar to our issues. Need to see if this sentiment trickles down. 🤔
As an Indian living in Seoul, I can confirm the mood here has improved. People are talking about stock market gains in coffee shops. But India's domestic demand is more diverse – we have 1.4 billion consumers. Korea's export reliance makes them vulnerable to global downturns. Balance is key. 🇮🇳
Good news for Korea but I worry about over-reliance on one sector. Remember when their economy struggled during the 2008 crisis? India should learn – diversify our manufacturing base. Also, 173% chip export growth won't last forever. Still, nice to see any economy recovering.