Korea: Election results lift consumer sentiment in April
April 29, 2016
Confidence among Korean consumers improved for the second consecutive month in April and likely reflected consumers’ more positive mood, following the results of the 13 April parliamentary elections. The Composite Consumer Sentiment Index (CCSI) published by the Bank of Korea (BoK) rose to 101 points in April from 100 points in March and represented a four-month high. As a result, the typically-volatile index rose slightly above the 100-point threshold, which separates optimists from pessimists.
According to the Central Bank, 2,200 households were surveyed between 12 and 20 April and the positive result in April likely reflected households’ mood following the 13 parliamentary elections, in which the ruling conservative Saenuri Party of President Park Geun-hye failed to secure a majority in the National Assembly. Voters’ dissatisfaction with the current government and their consequent punishment at the ballot box suggests that the expected political change will bring better times to the economy. Therefore, looking at the survey details, consumers’ assessment of the country’s current and future economic conditions improved. Moreover, households’ opinions regarding their own financial prospects were notably more positive. Finally, their prospects regarding employment and future purchases improved over the previous month.
Author: Ricardo Aceves, Senior Economist