Tuesday, April 22, 2025 10:25 PM EDT
Loading number of views...

Image Source: Pexels
Sentiment has bottomed since martial law episode, but recovery remains quite subdued
South Korea’s composite consumer sentiment index rose by just 0.4 points to 93.8 in April, staying below the neutral level for a fifth straight month, despite reduced domestic political uncertainty. On a positive note, consumers’ improved expectations for future spending and economic conditions indicate the potential for a modest improvement going forward. However, the index for current economic conditions fell back to the December level, suggesting weaker-than-expected growth for the current quarter.
Inflation expectations edged up to 2.8%, after staying at 2.7% for the previous two months. Since the rate remains below 3%, it won't be an immediate concern for the Bank of Korea (BoK).
Tomorrow, we expect the BoK to report a 0.2% quarter-on-quarter, seasonally-adjusted, increase in gross domestic product (vs 0.1% in the fourth quarter of 2024 and market consensus). This will mostly reflect a temporary boost from export front-loading thanks to US tariff policies. However, the risks are to the downside. After analysing the early April trade data and today’s sentiment data, a contraction in 2Q growth is possible. Expected policy support has been delayed, adding to downside risks to our current forecast.
The BoK remained on hold last week amid concerns about volatile FX moves and fiscal support delays thanks to political gridlock following the declaration of martial law in December. We expect policy support to be felt with a time lag, which should boost the recovery in the second half of 2025. Once the first-quarter GDP data is released tomorrow, we will revise our growth forecasts accordingly.
Consumer sentiment remained subdued in April

Source: CEIC
More By This Author:
Rates Spark: Eurozone To U.S. Gap To Keep On Widening Trade Tensions Weigh On Eurozone Consumer Confidence Soft March Data Strengthens Case For Polish Rate Cut In May
Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...
more
Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. ING forms part of ING Group (being for this purpose ING Group NV and its subsidiary and affiliated companies). The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved. ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam). In the United Kingdom this information is approved and/or communicated by ING Bank N.V., London Branch. ING Bank N.V., London Branch is deemed authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.. ING Bank N.V., London branch is registered in England (Registration number BR000341) at 8-10 Moorgate, London EC2 6DA. For US Investors: Any person wishing to discuss this report or effect transactions in any security discussed herein should contact ING Financial Markets LLC, which is a member of the NYSE, FINRA and SIPC and part of ING, and which has accepted responsibility for the distribution of this report in the United States under applicable requirements.
less
How did you like this article? Let us know so we can better customize your reading experience.