Consumer sentiment recovery stalls.
By Chung Ahemail@example.com.
Consumer sentiment has been slow to recover despite the government's stimulus measures and the central bank's key rate cut, data showed Friday.
According to the Bank of Korea (BOK), the Composite Consumer Sentiment Index (CCSI) remained unchanged at 107 in September from the previous month.
The CCSI measures consumer optimism about the economy. The CCSI is calculated as a sum of six variables, including living standards, prospective household income and prospective spending.
A CCSI above 100 indicates an improving outlook and below 100 a deteriorating one.
The index reached 108 during February-April, but after the Sewol ferry disaster it fell to 105 in May.
It increased slightly to 107 in June and then dropped to 105 in July.
Finance Minister Choi Kyung-hwan and his economic team introduced a series of stimulus measures to boost the slumping economy while the BOK cut the key rate by 025 percentage points to 225 percent in August.
Right after those measures, the CCSI increased slightly to 107 last month and remained the same this month.
Consumer sentiment about the economy fell to 97 from 100 and the index for the job market outlook also dropped, to 94 from 96.
"Although the CCSI remained flat this month, other indexes are turning positive," said Samsung Securities analyst Lee Seung-hoon.
"It will take time for the economic stimulus policies to generate tangible effects.
Other factors seem to be moving positively for future consumer sentiment."
He said consumer sentiment regarding domestic economic conditions and housing prices improved.
Confidence about prospective housing prices hit 124, the highest since January and up 11 points from July.
"The strong response to housing prices is attributable to the government's measures to boost the property market, boosting housing transactions," Lee said.
"It reflects the recovering expectations for people's property values."
The analyst also said that as lawmakers moved to normalize the functions of the National Assembly to pass a backlog of pending bills, the follow-up measures of the economic stimulus package were expected to gain momentum
Sentiment on living conditions rose to 93 from 92 the previous month.
The outlook for household income and consumer spending also gained one point each, to 102 and 110 respectively.
Consumer sentiment about domestic economic conditions was 83, up two points from August, while confidence about the future was down three points to 97.
A total of 2,200 households nationwide were surveyed between Sept. 12 and 19, of which 2,018 responded.