For the Third Quarter, Consumer Sentiment Slowed Down

Consumer Sentiment continued to rise for the first quarter (January to March) and the second quarter (April to June), but it has slowed down in the third quarter (July to September).

According to the report of ‘the consumer’s behavior survey submitted by Samsung Economic Research Institute said on August 9, the consumer sentiment index (CSI) of the third quarter fell to 55.5, dropped by 1.6 points over the second quarter.

‘CSI’ is the Weighted average value through telephone interview on the current living conditions, future living conditions prospect, current business, future business prospect and the durables purchase intention of the current point for nationwide 1,000 households at random. If ‘CSI’ exceeds 50, this quarter is better than the previous quarter, but if ‘CSI’ is less than 50, it is worse than the previous quarter. If ‘CSI’ is 50, it is same as the previous quarter.

The report said that the Consumer Sentiment is in the good state because the index fell but still exceeded 50.

The consumption expenditures index (The current consumer’s behavior compared with the previous year) rose to 55.2 increased by 0.6 points over the previous quarter. Showing the consumer sentiment of the coming one-year, the future consumption expenditures index was 56.9, continuously increased after the fourth quarter of the last year.

Besides, the influence on households’ consumption types by the decrease of the special consumption tax was researched for 1000 households. As the result of the research, 20% of total households purchased the goods with the benefit of the special consumption tax decrease.

Especially, 65 households whose annual average incomes are more than KRW 50 million, purchased goods with the decrease of the special consumption tax for 41.5%.

Ho-Won Choi bestiger@donga.com