S.Korea’s consumer confidence improves for a 2nd straight month

After a tough 2015 mired in a slump caused by MERS, Korea’s consumer confidence posted gains in April for the 2nd consecutive month. Data released by the central bank showed on Wednesday that S. Korea's composite consumer sentiment index (CCSI) stood at 101 in April, up 1 point from the previous month.

Confidence among South Korean consumers improved for two straight months, with consumer outlook for economic situations rising to a five-month high. Financial market volatility, caused by geopolitical risks earlier this year and crude oil price fall had kept confidence subdued. The index fell from 105 in November last year to 98 in February, before turning upward in March.

Inflation expectations, which measure outlook for headline inflation in the next 12 months, came in at 2.5 percent in April, unchanged for nine straight months since August 2015. BoK Governor Lee said there has been no sufficient outcome from major central banks’ QE and negative rate policies as global low growth and inflation limit policy impact.

First quarter of 2016 seems to have been solid in terms of inbound Chinese visitation and local consumer trends in Korea. This bodes well for 2016, as we now start to lap the MERS-related collapse that hit hard after late May 2015.