Published : Nov. 18, 2016 - 12:05
South Korean households' real income and spending retreated in the third quarter from a year earlier amid a protracted economic slowdown, a government report showed Friday.
An average household earned 4.44 million won ($3,700) per month in the July-September period, up 0.7 percent from the same period last year, according to the report by Statistics Korea.
But their inflation-adjusted real income fell 0.1 percent on-year over the cited period, while the country's consumer prices index has hovered below the 1 percent level for a few months.
At the same time, households' consumption also rose 0.7 percent on-year to an average 3.42 million won in the third quarter, but their real spending retreated 0.1 percent on-year.
The average consumption propensity, or the ratio of total consumption spending to disposable income, stood at 71.5 percent, remaining unchanged from the year before, with disposable income edging up 0.7 percent on-year to 3.6 million won.
The statistics office said the lingering economic recovery prompted South Korean people to tighten their belts.
Spending on groceries and nonalcoholic beverages fell 3.2 percent on-year and that on cigarettes and alcohol dropped 1.1 percent, while they also reduced their expenditures on health care and communications services by 3.8 percent and 2.3 percent, respectively.
But their spending on education services and entertainment gained 1.3 percent and 0.8 percent, respectively.
The flaccid household spending came as Asia's fourth-largest economy has been struggling with faltering exports, which posted negative growth for the 21st month in a row in October.
The Seoul government has rolled out fiscal stimulus policies to boost the economy to meet its earlier target of 2.8 percent growth for 2016.
According to central bank data, the country's gross domestic product expanded 0.8 percent in the second quarter from the previous quarter, accelerating from a 0.5 percent on-quarter expansion three months earlier. (Yonhap)