[Economic Term] Economic Sentiment Index (ESI)

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Today's economic term is economic sentiment index.

The Economic Sentiment Index (ESI) is an indicator that shows the economic psychology of each private economic entity.

Economic psychology (mental state of economic behavior of a household or a business) refers to the psychological state of the overall economic activities of households and companies, including production, consumption, investment, and employment.

This can be divided into consumer's sentiment, which includes intentions or judgments about consumption, savings, and income, and entrepreneur's sentiment, which includes intentions or judgments about production, investment, and employment.

The Bank of Korea is creating and publishing the Economic Sentiment Index (ESI), which can comprehensively evaluate the private sector's perception of the economic situation by combining BSI and CSI. ESI is calculated through a process such as selecting items with a high economic correlation between BSI and CSI and weighting their standardized indices.

If the ESI exceeds 100, it indicates that the current private economic sentiment is more optimistic than the past average, and if it is less than 100, it indicates that it is more pessimistic than the past average.

ESI can be checked at https://snapshot.bok.or.kr/dashboard/C8.

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