Seoul: South Korean retailers' business sentiment rose sharply to the highest level in four years, data showed Sunday, driven by hopes for the government-led cash handouts.

According to Yonhap News Agency, the Korean Chamber of Commerce and Industry (KCCI) said its retail business survey index (RBSI) stood at 102 for the July-September period, up sharply from 75 in the previous quarter. This marked the highest reading since the third quarter of 2021, when the index was 106. The RBSI is based on a poll of 500 retail businesses across the nation. A reading below 100 means that pessimists outnumber optimists.

The KCCI attributed the steep gain in sentiment to a recent rally in the stock market, expectations for a rate cut, and the government's stimulus packages that include the universal cash handouts, or "consumption coupons." President Lee Jae Myung, who took office in early June, has pledged to stimulate the economy. As part of that effort, the government proposed a 31.8 trillion-won (US$23.3 billion) supplementary budget, including 12.1 trillion won earmarked for consumption coupons, which will provide at least 150,000 won to each individual.

Since his inauguration, the stock market has rallied, with the benchmark KOSPI index climbing to a near four-year high on Thursday. The KCCI survey also found that more than half of the respondents believe the new administration will have a positive impact on their businesses.

By sector, the sentiment index for convenience stores came in at 108, followed by online retailers at 105. Supermarkets and department stores both recorded 100, while large discount chains lagged behind at 89. The KCCI's findings are in line with other recent indicators pointing to improved consumer confidence.

According to Yonhap News Agency, the Bank of Korea reported that the composite consumer sentiment index (CCSI) increased 6.9 points to 108.7 in June, marking the highest level since June 2021, when the index reached 111.1.