South Korea’s consumer confidence rebounded from a drop in December, helped by continued economic recovery from the coronavirus pandemic even as new Covid-19 cases surged to record highs.
The consumer sentiment index rose to 104.4 in January from 103.8 last month as investors became more optimistic about the outlook of Asia’s fourth-largest economy despite the latest virus wave fuelled by the Omicron variant.
Sentiment has also been buoyed by the 14 trillion won ($11.7 billion) supplementary budget announced by the government last week.
The extra funding is aimed at supporting smaller businesses and self-employed people after the government tightened distancing rules last month amid renewed pandemic woes.
“Going forward, our top priority is to reduce critically ill patients and deaths,” Prime Minister Kim Boo-kyum said on Wednesday.
Adding Uncertainty
But the surging virus infections are adding uncertainty to the economy as the country reports record daily cases.
South Korea’s new infections surpassed 13,000 cases for the first time on Wednesday.
The record of 13,012 comes just a day after the tally topped 8,000 for the first time amid a rapid spread of the Omicron variant despite the extension of tough social distancing rules.
The South Korean economy grew at the fastest pace in more than a decade last quarter on the back of robust exports.
It expanded 4.1% in the fourth quarter from a year earlier. The Bank of Korea this month raised interest rates again to 1.25% in its third rate increase since August as the central bank sought to combat inflation.
- George Russell, with Reuters
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