The Consumer Survey for July 2020 released on July 29 by the central Bank of Korea said the composite consumer sentiment index showed recovery for three consecutive months. (Yonhap News)

By Xu Aiying and Lee Jihae

Consumer sentiment has shown recovery for three consecutive months after withering due to COVID-19.

The government's economic policy as shown through emergency relief payments and a third supplementary budget to tackle the pandemic's effects seem to have had an impact.

According to the Consumer Survey for July 2020 released on July 29 by the central Bank of Korea, the composite consumer sentiment index (CCSI) was 84.2, up 2.4 points from that in June.

The CCSI is based on six criteria: current and prospective living standards, prospective household income and spending, and current and prospective domestic economic conditions. A figure higher than the standard value of the long-term average from January 2003 to December 2019 of 100 is considered optimistic and a lower number means a pessimistic outlook.

The figure for current living standards was 85, up a point from June, and that for prospective household income 90, or 2 points higher. The index for current domestic economic conditions was 49, a 5-point jump, and that for prospective household spending 95, up 2 points. The figures for prospective living standards and domestic economic conditions remained the same as in June at 87 and 70, respectively.

The CCSI plummeted from 104.2 in January to 70.8 in April due to COVID-19, but has steadily risen over the last three months. It was 77.6 in May, 81.8 in June and 84.2 this month.

The central bank said the CCSI has apparently risen due to the government's aggressive policy responses such as the stimulus payment, and forecast that such responses and how COVID-19 unfolds will affect the index.

This chart shows the movement of the composite consumer sentiment index. The long-term average between January 2003 and December 2019 is set at a standard value of 100, with an index higher than that showing optimism and one lower displaying pessimism. (Bank of Korea)