Signs of Consumption Overheating

CSI (Consumer Survey Index) which forecasts the customer trend after 6 months, showed the highest points after the lapse of 3 years and 7 months. Accordingly, it is shown that the expectation of economic recovery and Consumer Sentiment continue to increase.

According to `Consumer Prospect Survey` published by Korea National Statistical Office on July 12, In June, CSI increased to 110.6 points increased by 1.5 points over 109.1 points in May.

Since the Korea National Statistical Office started the investigation of CSI in November 1998, it was the highest points exceeding 10.9.7 point which was the highest points in March.

When CSI exceeds 100, it means that households which forecast the better business condition and living condition after 6 months are more than households which forecasts the worse business condition and living condition.

Jeon, Sin-Ae, the assistant manager of Statistics Analysis, Korea National Statistical Office said ꡒCSI which reached its most points in March, hesitated in April and May, but reached its highest point in June. It has kept the high level continuously and so the consumer sentiment has increasedꡓ.

Business Expectations Index which shows the business prospect increased to 122.7 point in June over April (109.4) and May(109.1). So, households that are optimistic about the business have increased.

Expectation Index on consumer`s expenditure increased to 110.5 point in June from 109.9 point in May. It shows that households that increase the customer expenditure owing to the economic recover have increased.

As the Customer Evaluation Index which shows the current business and living condition over one before 6 months increased to 108.1 from 107.6, there are many households which be optimistic about the economic recovery.

Joong-Hyun Park sanjuck@donga.com