Consumer sentiment hits 7 1/2-yr high in Aug. on exports, stimulus

A traditional market in Seoul is crowded with visitors on Sunday. Yonhap

Korea's consumer sentiment rose to its highest level in more than seven years in August, driven by solid exports and optimism over the government's supplementary budget, the central bank said Tuesday.

The composite consumer sentiment index (CCSI) stood at 111.4 this month, up 0.6 points from July, according to a survey conducted by the Bank of Korea (BOK).

The reading marks the fifth consecutive month of increase and the highest level since January 2018, when the index reached 111.6.

The index plunged below 90 in December, following former President Yoon Suk Yeol's imposition of martial law, and then remained in the 90-point range for months before climbing above 100 in May.

A reading above 100 indicates that optimists outnumber pessimists, while a figure below 100 means the opposite.

August's increase was attributed to a recent improvement in private spending, driven by the Lee Jae Myung government's stimulus measures aimed at revitalizing growth momentum and boosting private consumption, as well as by robust exports.

Exports, a key growth engine, expanded by 7.6 percent year-on-year in the first 20 days of August, led by strong demand for semiconductors and automobiles. In July, exports rose 5.9 percent from a year earlier.

Retail sales, a gauge of private spending, gained 0.5 percent on-month in July, backed by strong demand for clothing and cosmetics, government data showed.

"The subindex for current economic conditions rose by 7 points, driven by improvements in consumption and continued strong exports, leading the overall increase in consumer sentiment," BOK official Lee Hye-young told a press briefing.

"But the future economic outlook index declined due to concerns over a potential export slowdown stemming from the United States' tariffs," the official added.