S. Korean consumer sentiment climbs to near 2-year high in May

SEOUL, May 26 (Yonhap) -- South Korea's consumer confidence soared to a near
two-year high in May amid rising optimism about the easing of a sharp economic
downturn, the central bank said Tuesday.

According to the Bank of Korea (BOK), the consumer survey index (CSI) -- a gauge
of consumers' overall sense of their economic outlook, living conditions and
future spending -- climbed to 105 in May, compared with 98 the previous month.
It is the first time that the CSI has climbed above the benchmark 100 since the
first quarter of 2008 when the index reached 102. The May figures also marked the
highest level since the third quarter of 2007 when it came in at 108, the BOK
added.
A reading above 100 means optimists outnumber pessimists. The survey of 2,200
households in 56 major cities was taken from May 12-19.
"A decline in job losses and some budding signs of economic improvement raised
expectations for an economic recovery and improving consumer sentiment," said
Jeong Kui-yun, an official at the BOK. "But as economic data related to the real
economy is still sluggish, it remains to be seen whether the index will continue
to stay above the benchmark."
Reflecting growing optimism for the economy, the CSI measuring current economic
situations jumped by 23 points to 88, the BOK added.
The upbeat data comes as a set of improving economic data are reinforcing
optimism that the Korean economy may be approaching its bottom.
Asia's fourth-largest economy narrowly averted a recession, or two consecutive
quarters of contraction, in the first quarter by growing 0.1 percent from three
months earlier. It shrank 5.1 percent in the final quarter of 2008.
Last month, parliament approved a record 28.4-trillion-won (US$22.7 billion)
extra budget aimed at generating jobs and boosting domestic demand.
In May, the BOK froze its key interest rate at an all-time low of 2 percent for a
third straight month, saying that a sharp decline in economic activities has
clearly eased.
The central bank had made six consecutive rate cuts totaling 3.25 percentage
points until February in a bid to bolster the slumping economy.
sooyeon@yna.co.kr
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