Consumer sentiment showed three consecutive months of improvement despite rising inflation concerns and stock market declines, supported by semiconductor-centered exports and expectations of wage increases.

Household living conditions and income prospects improved somewhat, but current economic perception worsened.

Rising expectations for housing prices surged significantly, with housing price outlook reaching its highest level in 4 years and 10 months.

According to the Bank of Korea's "July 2026 Consumer Survey," the July Consumer Confidence Index (CCSI) rose 0.2 points to 106.8 compared to the previous month. Consumer sentiment continued three consecutive months of improvement since May, though the rate of increase was limited.

The July consumer confidence index recorded 106.8, up 0.2 points from the previous month.

Exceeding the baseline of 100, consumers' economic sentiment maintained an optimistic level compared to the long-term average. However, as the pace of increase slowed compared to May and June, the recovery speed of consumer sentiment appeared somewhat gradual.

▲ Living Conditions and Income Outlook Improve...Current Perception Retreats

Current living conditions CSI declined 1 point to 93, while living conditions outlook CSI rose 1 point to 98.

Household income outlook CSI also rose 1 point to 101, while consumer spending outlook CSI remained at 110 compared to the previous month.

This result was interpreted as showing that while assessments of current living conditions worsened somewhat, expectations for improved living standards and income in the future are being maintained.

▲ Economic Outlook Worsens...Employment and Interest Rate Expectations Unchanged

Current economic outlook CSI fell 2 points to 84 compared to the previous month. Meanwhile, future economic outlook CSI remained at 92, and employment opportunity outlook CSI and interest rate level outlook CSI showed no change at 89 and 126 respectively.

Perceptions of the current economy worsened somewhat, but expectations regarding future economic conditions, labor market, and interest rate environment remained at existing levels.

▲ Savings to Decrease, Household Debt Projected to Increase

Current household savings CSI and household savings outlook CSI both fell 1 point to 97 and 100 respectively.

Meanwhile, current household debt CSI and household debt outlook CSI both rose 1 point to 100 and 98 respectively.

Consumers were found to perceive that savings capacity will decline somewhat while household debt is likely to increase.

▲ Housing Price Expectations Surge 7 Points...Inflation Expectations Stabilize

Housing price outlook CSI surged 7 points to 127 compared to the previous month, recording the largest increase.

This is the highest level since September 2021 (128).

Meanwhile, inflation level outlook CSI declined 1 point to 149, and wage level outlook CSI showed no change at 124.

Expectations regarding the housing market rose rapidly while concerns about inflationary pressures eased somewhat.

▲ Expected Inflation Falls...Mid to Long-Term Price Outlook Stabilizes

The expected inflation rate for the next one year fell 0.1 percentage point to 2.7% compared to the previous month.

The expected inflation rate for three years ahead also declined 0.1 percentage point to 2.6%, while the expected inflation rate for five years ahead remained at 2.6% compared to the previous month.

Perception of consumer price increases over the past year was maintained at 3.0%, with expected inflation responses most concentrated in the 2-3% range for one year, three years, and five years ahead.

▲ Oil Products Top Inflation Drivers...Impact of Agricultural and Fishery Products Expanding

Oil product prices were cited most frequently at 57.5% as the item with the greatest impact on inflation over the next year, followed by agricultural, livestock, and fishery products at 34.1% and public utility charges at 33.6%.

However, the response rate for oil products decreased 20.0 percentage points from the previous month, while agricultural, livestock, and fishery products increased 5.5 percentage points and public utility charges increased 4.0 percentage points, showing consumers' price concerns shifting from energy to living expenses.