Consumer Sentiment and Services Hiring in South Korea Show Strong Improvement For Third Straight Month Since MERS Outbreak

by Therese Agcopra / Sep 28, 2015 10:24 AM EDT

Consumer sentiment in South Korea has been consistently going up for the third straight month since the Middle East Respiratory Syndrome or MERS outbreak.

KBS World Radio reports Sept. 25 the Bank of Korea has announced that the consumer sentiment index climbed to 103 in September, which is one point higher than last month's recorded 102 standing.

The country's CSI slipped to 99 in June as the country suffered from the MERS outbreak. Signs of recovery were seen in July when the CSI peaked at 100. Korea Joongang Daily writes Sept. 26 that an index reading over 100, which is South Korea's long-term average from 2003 to 2014, shows that there are more consumers with a positive outlook on the country's economy than those who are pessimistic about it.

Household savings CSI and savings outlook CSI are up at 88 and 94 points respectively, which shows that consumers have saved and are expecting make more savings in the next six months.

Local consumers also expect prices to increase 2.4 percent in the next 12 months, which shows a 0.1 decrease from August's 2.5 percent.

"As MERS has been contained, we have seen recovery in the number of foreign tourists," said Bank of Korea official Choo Seong Jae who is in charge of compiling economic statistics. "Improvements in the state of living index and economic view index have helped the overall consumer sentiment index remain above the reading of 100 for three straight months," he continued.

In June, the number of tourists dropped to 41 percent, and made a strong rebound starting September.

According to EconoTimes' report Sept. 9, the improvement in the consumer sentiment index also coincided with the increase in services hiring in South Korea. Employment climbed up to 102 points in August after plummeting to 99 in June.

The South Korean government is optismistic that the CSI will continue to improve in the coming months. Finance Minister Joo Hyung Hwan said, "We are seeing improvements in spending and investments since MERS and the drought (in summer)."