Sentiment improves in March

Korea's overall consumer sentiment improved this month from a month earlier helped by improving exports and eased political uncertainties, central bank data showed Friday.

The composite consumer sentiment index for March came to 96.7, compared with 94.4 a month earlier.

A reading below 100 means pessimists outnumber optimists.

A BOK official attributed the improved consumer sentiment to increased exports and the Constitutional Court's recent decision to oust President Park Geun-hye over a corruption scandal.

Analysts said the court's decision removed a key political uncertainty in the country.

A separate index gauging the people's sentiment toward the current economic conditions came to 59 for March, up from 55 in February.

An index measuring the public's feelings toward economic conditions in the next six months stood at 77, up from 70 tallied last month, according to the BOK.

People's perceptions of employment slightly improved, with an index measuring the sentiment toward job opportunities coming to 76 in March, up from 70 in February, according to the BOK.

The monthly index is based on a survey of 2,026 households throughout the country from March 10 to 17.

Also, Korea’s financial system remains resilient despite increased risks stemming mostly from rising household debt, the country’s central bank said.

The country’s outstanding household credit — which is composed of household loans and credit card spending — came to 1,344.3 trillion won ($1.19 trillion) at the end of 2016, up 11.7 percent from a year earlier, the BOK said in a statement.

Increased household credit and potential risks posed by financially troubled companies may present risks to the country’s financial system.

And there could be a capital flight if the Federal Reserve speeds up the pace of interest rate hikes.

But chances of any drastic foreign capital outflows will be limited due to the country’s solid fundamentals, the BOK said.