Korean consumer sentiment hits 6-month high in November

South Korea’s consumer confidence hit a six-month high in November, but consumers’ inflation expectations still remained close to a three-year high, the central bank said Thursday.

The consumer sentiment index ― a gauge of consumers’ overall economic outlook, living conditions and future spending ― reached 103 for November, up from 100 tallied in the previous month, according to a survey by the Bank of Korea.

The November data marked the highest level since the index came in at 104 in May.

The sentiment index, a gauge of future private spending, fell below the benchmark 100 for the second straight month in September as a faltering U.S. economy and Europe’s debt problems raised doubts about the global economy.

A reading above the benchmark 100 means optimists outnumber pessimists. The survey, based on a poll of 2,002 households in 56 cities nationwide, was conducted from Nov. 11-18.

“The eurozone debt crisis and gloomy global economic outlook weighed on the sentiment. But it seemed that consumer confidence recovered somewhat from sharp falls recorded in August and September,” said Jang Wan-sub, an official at the BOK.

“Given ongoing external economic uncertainties and high inflation at the domestic front, it would be hard for the index to continue to go up.”

Consumers’ inflation expectations stayed at a high level in November, indicating concerns that high inflation would undercut consumer spending.

South Korean consumers in November forecast inflation would reach an annual average of 4.1 percent over the next 12 months, down from 4.2 percent estimated in the previous month, according to the BOK.

South Korea’s consumer prices grew 3.9 percent from a year earlier in October, slowing from a 4.3 percent on-year gain in the previous month.

The October consumer inflation stayed below the upper ceiling of the BOK’s 2-4 percent inflation target band for the first time this year, but inflationary pressure still lingers.

The sub-index gauging consumers’ assessment of current economic conditions rose by 9 to 75 and the index measuring their outlook for the economy reached 86 in November, up from 78 in October, the BOK said.

The index gauging the inflation level stood at 140 this month, down 5 points from the previous month as the growth pace of consumer inflation eased. (Yonhap News)