| South Korea's consumer confidence rose to a seven-year high in July as a set of economic data boosted the prospects of an economic recovery. |
South Korean consumer confidence hit its highest in nearly seven years in July as the central bank data showed on Monday that government stimulus policies began leading the economic recovery from the protracted global recession.
The Bank of Korea (BOK) said in a statement that the consumer survey index (CSI), which measures sentiment in six categories, rose to 109 in July, up from 106 in June. It is the highest level since the third quarter of 2002, when the bank published its confidence survey on a quarterly basis.
A reading above 100 indicates that most consumers are optimistic about economic conditions and their standard of living for the coming months. The index had been compiled on a quarterly basis until the second quarter of 2008.
South Korea’s economy expanded at the fastest pace in almost six years last quarter as exports and household spending jumped. Gross domestic product rose 2.3 percent from the first quarter, when the nation skirted a recession by growing 0.1 percent, the Bank of Korea said last week.
The Kospi stock index has climbed 34 percent this year. Sales at the nation’s major department stores rose for a fourth month in June as consumers bought more home appliances.
The government has pledged about 67 trillion won ($52 billion) in stimulus measures, including a 17.2 trillion won package of cash handouts, cheap loans, labor-market aid and infrastructure spending. The central bank pared the benchmark interest rate by 3.25 percentage points between October and February, the most aggressive easing in a decade.
President Lee Myung-bak and Finance Minister Yoon Jeung-hyun said it was premature to prepare for an exit from the government's easing policy, pledging authorities would maintain it to support a nascent recovery.
The BOK held its policy interest rate steady this month at a record low of 2.0 percent, for the fifth month in a row. The bank next reviews the base rate, which applies to its 7-day repurchase agreements, on August 11.
The consumer confidence index is based on a survey of 2,200 households in 56 major cities, conducted by mail and telephone between July 13 and July 20.
Edited by Jung, Eunsun
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