South Korea’s Household Consumption Falling
Private (household) consumption in South Korea fell in Q-1 on lower household income, a government report revealed Friday.
Monthly private consumption averaged 2,669,000 Won (US$2,262) per household during the January-March period, up 0.6% from the same frame last year, according to Statistics Korea.
Real private consumption, adjusted for inflation, declined 0.4% in Q-1.
The decline was attributable to lower household income. The monthly average household income was 4,555,000 Won in Q-1, up 0.8% from a year earlier.
However, the household income adjusted for inflation fell 0.2%, marking the downward trend for 2 Q’s running.
Earned income inched up 0.3% on lackluster employment, with lease income increasing 3.3% due to higher rents. But, property income fell 21% on lower interest income, caused by low interest rates.
Monthly average disposable income, which gauges household income minus non-consumption expenditure, was 3,704,000 Won per household in Q-1, up 1% from a year ago.
Consumption propensity, which means the ratio of private consumption to disposable income, was 72.1% in Q-1, down 0.3% from a year earlier.
The Q-1 ratio neared to the record low of 71.5% tallied in Q-3 of last year. The consumption propensity kept a downward trend since Y 2011, indicating the global economic slowdown and weak domestic demand that boosted worries about economic uncertainties.
Household spending on liquor and tobacco spiked 22.2% in Q-1 on a yearly basis due to a rise in cigarette prices.
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