News-based economic sentiment hits 4-year high on optimism over US tariff deal
People shop at a traditional market in Seoul, Monday. Yonhap
Public sentiment toward the economy, as measured through economic news reports, has climbed to its most positive level in more than four years, according to the Bank of Korea (BOK) Tuesday.
The improvement is largely attributed to optimism surrounding the recent Korea-U.S. summit held during the Asia-Pacific Economic Cooperation (APEC) meetings, where the two nations finalized a tariff agreement.
Data from the central bank showed that the news sentiment index (NSI) reached 142.62 as of Friday, the highest level since July 29, 2021, when it stood at 125.25.
The index is produced by analyzing sample sentences from economic news articles, which are classified through machine learning as positive, negative or neutral.
It is calculated based on the difference between the number of positive and negative sentences, with a score above 100 indicating that overall economic sentiment is more optimistic than the historical average.
The index plunged to 77.08 on Dec. 10 last year following former President Yoon Suk Yeol’s martial law fiasco, but has gradually rebounded since then.
It approached the 100 threshold on Aug. 25, closing at 99.66, remained relatively stable for a period and then surged past 120 on Oct. 29.
The sharp uptick coincided with the summit between President Lee Jae Myung and U.S. President Donald Trump held alongside the APEC Economic Leaders’ Meeting in Gyeongju, North Gyeongsang Province, last week.
The index jumped from 118.36 on Oct. 28, the day before the meeting between the two leaders, to 121.2 on Oct. 29, 124.05 on Oct. 30 and 124.62 on Oct. 31, reflecting improved sentiment following news of the Korea-U.S. tariff deal, which was concluded after a nearly three-month tug-of-war.
“The Korea-U.S. tariff negotiations went very well, and I think it’s a relief," BOK Gov. Rhee Chang-yong said during a parliamentary audit on Oct. 29.
The continued rally of the benchmark KOSPI, which has repeatedly set new record highs, also appears to have contributed to the rise in the NSI.
Expectations for a broader improvement in overall economic sentiment have also grown, as the NSI is generally regarded as a leading indicator, typically moving about one month ahead of the Consumer Composite Sentiment Index and two months ahead of the Business Survey Index for the manufacturing sector.