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/ Yonhap

Consumer sentiment rose for the second consecutive month, sustaining an upward trajectory this month. This improvement is driven by a brighter perception of current economic conditions, fueled by robust exports and a surging stock market. Concurrently, expectations that interest rates and housing prices will climb going forward expanded significantly.

According to the "June 2026 Consumer Survey Results" released by the Bank of Korea on June 23, the Composite Consumer Sentiment Index (CCSI) for this month stood at 106.6, up 0.5 points from the previous month. This follows a 6.9-point jump in May, marking a two-month winning streak.

The CCSI is a psychological indicator calculated using six key components of the Consumer Survey Index (CSI). With a long-term average benchmark of 100, a reading above 100 indicates that consumers view current economic conditions more optimistically than the historical average. The central bank explained that despite a dip in perceived economic conditions caused by inflation, expanding optimism driven by strong exports and a rallying stock market lifted overall consumer sentiment.

Breaking down the figures, the index for current economic judgments rose by 3 points month-on-month to 86. The index for current living standards edged up 1 point to 94 over the same period, while outlooks for future living standards, prospective household income, and prospective consumer spending remained unchanged from the previous month. Conversely, expectations regarding future economic conditions soured slightly, with the prospective economic outlook index slipping 1 point month-on-month to 92. Analysts noted that while hopes for an end to the war in the Middle East provided some cushion, anxieties over climbing loan rates and stretched stock market valuations acted as negative headwinds.

The prospective house price outlook index surged by 8 points from the previous month to 120, largely driven by an accelerating expansion in apartment purchase and lease prices centering on Seoul and the Gyeonggi metropolitan area. The prospective wage level outlook index also gained 2 points to 124 over the same period. Notably, as expectations for a benchmark interest rate hike intensified, the prospective interest rate level outlook index jumped 12 points to reach 126. This marks the sharpest monthly increase in nine and a half years, dating back to December 2016.

Expected inflation over the next year held steady at 2.8%, matching the previous month's reading. The central bank explained that while there were upside pressures, including accelerating consumer prices and a strong foreign exchange rate, the index remained anchored due to offsetting factors such as anticipation of an end to the Middle East conflict and expectations of tighter monetary policy. When asked about major items poised to impact consumer price inflation, the largest share of respondents (77.5%) cited petroleum products. The inflation outlook for the upcoming year also stayed flat compared to the previous month at 3.0%.

The survey was conducted from June 9 to 16, targeting 2,500 households in urban areas nationwide, with 2,245 households responding.

                                                                                                         Han Sang-wook