SEOUL, South Korea’s consumer sentiment rose for a second consecutive month in January amid moderating inflation, a recovery in exports and hopes for an end in the Federal Reserve’s rate hikes, a central bank poll showed Wednesday.

The composite consumer sentiment index stood at 101.6 in January, up from 99.7 the previous month, according to the survey conducted by the Bank of Korea (BOK).

A reading above 100 means optimists outnumber pessimists.

The January figure marks the highest since August 2023, when the corresponding reading was 103.3.

The central bank said consumer sentiment improved amid a slowdown in inflation, a rebound in exports and the growing expectations over an end in the Fed’s rate-hiking cycle.

Inflation expectations fell this month compared with the previous month amid a downward trend in consumer prices, the survey showed.

This month, ordinary people expect consumer prices to rise 3.0 percent for the year ahead, down from the previous month’s 3.2 percent.

The figures are closely w
atched, 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.

In December, consumer prices rose 3.2 percent from a year earlier, the fifth consecutive month that the prices have stayed above the 3 percent level, though the growth has slowed down for two months in a row.

The on-year price growth fell below 4 percent in April for the first time in more than a year and had been on a constant decline to fall to a 25-month low of 2.3 percent in July.

The central bank said earlier a slowdown in inflation may be slower than expected down the road.

Earlier this month, the bank held its key interest rate steady at 3.5 percent for the eighth straight time amid a slowdown in growth and still high inflation.

The rate freeze comes after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.

Source: Yonhap News Agency