Worsening Sentiment
Consumer sentiment, which increased slightly in the beginning of the year, failed to continue an upward trend and dropped in three months. Expectations for future family income dropped to the lowest figure in one year and six months.
According to the Consumers' Behavior Investigation Result in March reported by the Bank of Korea on March 26, the consumer's sentiment index dropped 2 percent to 101 points from the previous month.
The consumer sentiment index that shows the sentiment of consumer's economic situation synthetically, targeted 2,200 families in cities across the nation. It is calculated by using 6 indexes among the Consumer Survey Index (CSI). If the long term average (from January 2003 to December 2014) is higher than the basic value 100, the consumer sentiment is optimistic. And if it is lower than 100, consumers sentiment is pessimistic.
In particular, both prospects for family income and consumption expenditure dropped 3 points from the previous month, recording 99 and 106 respectively. It means that consumers closed their purses to spending, with utmost as the economic situation is uncertain.
The family debt prospect compared to the previous six months decreased one point from the previous month to 104 points, and the family debt prospect after six months was 99 points, which was same as the previous month.
The price prospect (expected inflation) for one year in the future dropped 0.1 percentage points from the previous month to 2.5 percent.
However, the housing price prospect after one year recorded 123 points, up 5 points from the previous month, indicating that people have an anticipation of an increase in housing price. Also, the expected inflation for one year in the future will be led by public utility charges (56.4 percent) and housing rent (51.5 percent).