Consumer sentiment snaps 3-month advance in March amid rising prices

South Korea's consumer sentiment snapped an improvement for the third consecutive month in March amid soaring prices of farm goods and a slump in private spending, a central bank poll showed yesterday.

The composite consumer sentiment index stood at 100.7 this month, down from 101.9 the previous month, according to the survey conducted by the Bank of Korea (BOK).

A reading above 100 means outnumber pessimists.

The central bank said consumer sentiment declined amid a rise in prices of agricultural goods and sluggish domestic demand.

Inflation expectations rose month, snapping a two-month

This month, ordinary people expect consumer prices to rise 3.2 per cent for the year ahead, compared with the previous month's 3 per cent.

The figures are closely watched, as their upward move could cause businesses to raise prices and people to ask for pay raises, thereby resulting in more upward pressure on inflation going forward.

Last month, consumer prices, a key gauge of inflation, rose 3.1 per cent on-year, compared with a 2.8 per cent increase a month earlier, marking the first time in four months that the price growth accelerated in an on-month term.

The country's central bank froze its key rate for the ninth straight session at 3.5 per cent last month amid slower-than-expected inflation moderation and high household debt.

optimists this decline.

The rate freezes came after the Bank of Korea delivered seven consecutive rate hikes from April 2022 to January 2023.

Retail sales in South Korea rose 13.7 per cent on-year in February on the back of rising demand during the Lunar New Year holiday, data showed yesterday.

The combined sales of 25 major offline and online retailers came to 14.7 trillion won (US$10.9 billion) last month, compared with 12.9 trillion won a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

Offline store sales shot up 11.5 per cent on-year, as the holiday occurred in February this year, in contrast to January in 2023.

Supermarkets' sales jumped 21 per cent over the period, driven by stronger demand for foodstuffs that rose 29.5 per cent as consumers prepared for family gatherings.

Sales at department stores also rose 7.2 per cent on-year in February, with imported luxury goods leading the overall gains.

Convenience stores also saw their sales advance 9.4 per cent over the period, led by ready-to-eat meal products.

Sales from online platforms shot up 15.7 per cent on-year in February, driven by robust demand for foodstuffs that posted a 36.2 per cent jump.

Amid lingering inflation, however, consumers scaled back their online expenditures on fashion and sports items, which fell 9.5 per cent and 4.3 per cent, respectively.