S. Korea's May CSSI posts largest increase in 55 months, signals growing optimism

Consumer sentiment here in South Korea saw a sharp rise in May.

A temporary pause in U.S. tariffs and expectations for the new South Korean administration helped pull up that consumer confidence.

Park Jun-han reports.

South Korea's consumer sentiment in May saw its largest increase in 4 years and 7 months.

The Bank of Korea released on Tuesday the country's Composite Consumer Sentiment Index, which reflects consumers' views on the state of the economy.

Rising by 8 points from April’s 93.8 (1) to 101.8 (2) in May, the index recorded its strongest one-month gain since October 2020.

A CCSI above 100 indicates optimistic consumer sentiment compared to the average of the last twenty years.

For the past five months, the index has remained below 100.

However, as the index in May surpassed 100, it signaled a shift from pessimism to optimism.

The index’s six elements, including current living standards and prospective household spending, all saw a rise in May, with prospective domestic economic conditions rising by 18 points () compared to last month.

Among the various components, several indicators pointed to a rise in optimism.

This shift is likely tied to the 90-day suspension of "reciprocal" U.S. tariffs that helped ease some concerns over global trade uncertainty.

Also, expectations surrounding the new administration's economic policies after the upcoming election, along with anticipated progress in South Korea-U.S. tariff negotiations, contributed to the boost in consumer confidence.

Meanwhile, prospective housing prices in May recorded 111, three points higher than last month.

The outlook for housing prices has been rising for three straight months, as more people expect further increases due to continued apartment price hikes in the metropolitan area.

Park Jun-han, Arirang News.