Consumer sentiment down in May amid inflation woes

gettyimagesbank

Korea's consumer sentiment worsened in May amid worries that monetary tightening to rein in inflation could undercut economic growth, a central bank survey showed Tuesday.

The composite consumer sentiment index stood at 102.6 in May, down 1.2 points from a month earlier, according to the survey by the Bank of Korea (BOK).

A reading above 100 means optimists outnumber pessimists.

Worries grew that rising inflation and the central bank's push to tighten monetary policy could weigh on the economic recovery despite expectations that eased COVID-19 social distancing rules could boost consumption.

Last month, the BOK hiked its policy rate by a quarter percentage point ― the fourth increase since August last year ― to 1.5 percent to keep inflation in check.

BOK Gov. Rhee Chang-yong recently did not rule out the possibility of a "big-step" 0.5 percentage point rise in borrowing costs should inflation pressure persist. The central bank is to hold a rate-setting meeting Thursday.

The country's consumer inflation spiked 4.8 percent year-on-year in April, the fastest gain in more than 13 years, and up from a 4.1 percent gain in March.

With worries over protracted supply chain disruptions and rising commodity prices, the public expected inflation to rise 3.3 percent for the next 12 months, 0.2 percentage point higher than predicted a month earlier, according to the bank survey. (Yonhap)

Site Map E-paper Subscribe Register LogIn
Site Map E-paper Subscribe Register LogIn