Consumer Sentiment Declines for the First Time in Four Months: "Stock Market Correction Has Broad Impact"

CCSI at 104.5, Down 2.3 Points
"Lowest Level Since Middle East Fallout"
Stock Market Correction Has Broad Impact on
Economic and Household Financial Outlook
Accumulated Cost of Living Increases
Dampen Perceived Economic Sentiment

The Consumer Composite Sentiment Index (CCSI) declined for the first time in four months. Despite the positive real economy, increased volatility and corrections in the domestic stock market, as well as accumulated price increases, have led to a deterioration in perceived economic conditions. However, as the index remains above the long-term average of 100, reflecting continued optimism, analysts note that it is too early to determine a definitive trend in consumer sentiment.

"CCSI at 104.5 in August... Lowest Level Since Middle East Fallout"

According to the "August 2026 Consumer Trend Survey Results" announced by the Bank of Korea on the 25th, this month's CCSI was 104.5, a decrease of 2.3 points from the previous month. The CCSI is a sentiment indicator that comprehensively reflects consumer perceptions of economic life. It is calculated using six key indices that make up the Consumer Sentiment Index (CSI), such as current living conditions, household income outlook, and spending outlook. The long-term average (from January 2003 to December 2025) is set as the baseline at 100; a score above 100 indicates a more optimistic outlook than the long-term average, while a score below 100 indicates a more pessimistic view.

The CCSI fell below the 110 level in March this year due to the impact of the Middle East conflict. In April, concerns over energy supply disruptions, rising prices, and an economic slowdown pushed it down to 99.2. As expectations for an end to the Middle East war grew and the stock market surged, along with robust semiconductor exports, the CCSI improved for three consecutive months but declined again to the 104 range this month. Park Yongmin, head of the Economic Sentiment Survey Team at the Economic Statistics Department 1 of the Bank of Korea, explained, "Even though the real economy remains strong, corrections in domestic stock prices and the continued increase of more than 3% in consumer prices have combined to weaken consumer sentiment."

"Stock Market Correction Exerts Broad Impact on Consumer Sentiment"

The KOSPI index experienced extreme volatility last month, undergoing a correction of more than 20% compared to the previous month. This month, it fluctuated between the low and high 6,000-point range. These stock market movements have affected perceptions of not only the current economic situation, but also household financial conditions, such as perceptions of current living conditions. The Current Economic Assessment CSI (79) dropped by 5 points from the previous month as the expansion of stock market volatility led to more pessimistic economic views. The Future Economic Outlook CSI (89) also fell by 3 points. The Current Living Conditions CSI (92) declined by 1 point, attributed to falling stock prices and similar factors.

The stock market correction also dragged down the Current Household Savings CSI (94) by 3 points. This score, which reflects not only bank deposits and savings accounts but also investments in stocks and funds, was negatively impacted by the stock market correction. However, the Household Savings Outlook CSI (100) remained unchanged from the previous month and is still higher than the long-term average (95). While the recent stock market correction had a negative effect on current household savings, there is no strong sentiment tilt regarding additional corrections.

The Housing Price Outlook CSI, which had risen sharply since April (125 this month), fell by 2 points this month, influenced by the announcement of tax reforms and housing supply measures. Nevertheless, it remains significantly above the long-term average (107). The Job Opportunity Outlook CSI (86) declined by 3 points as the number of manufacturing and construction jobs keeps shrinking and youth employment continues to stagnate, particularly in industries heavily exposed to artificial intelligence (AI).

The one-year expected inflation rate, which measures consumer expectations for the inflation rate over the next year, stood at 2.7%, unchanged from the previous month. This was the result of upward factors such as the ongoing stalemate in the Middle East conflict, combined with downward factors like expectations for interest rate hikes and a weakening KRW/USD exchange rate. The three-year and five-year expected inflation rates both remained at 2.6%, the same as the previous month.

This survey was conducted from August 7 to 14 among 2,500 urban households nationwide, of which 2,244 households responded.

This content was produced with the assistance of AI translation services.