Published : Dec. 6, 2016 - 16:31
South Korean’s overseas spending hit a new high in the third quarter on the back of increased outbound travel, central bank data showed Tuesday.
According to data by the Bank of Korea, Korean people’s spending in foreign countries is estimated to have spiked 17 percent to 8.2 trillion won in the period of July to September this year from a year earlier. The increase marks a 23 percent surge from the second quarter.
It is the first time the quarterly overseas spending exceeded 8 trillion won.
The overseas spending data contrasts with the consumer sentiment which plunged to 95.8 in November, the lowest since April 2009 when it was 94.2. A figure below 100 means pessimists outnumber optimists.
The data did not include local residents’ online purchases of products from foreign countries or their spending during overseas business trips.
The fast rise of overseas spending is attributed to a continued surge in the number of Korean travelers visiting other countries. According to data by the Korea Culture and Tourism Institute, the number of outbound travelers climbed 19.4 percent to 6 million in the third quarter from 5 million in the second quarter.
(image by 123rf)
This year’s five-day holiday for Chuseok, or Korean Thanksgiving, during Sept.14-18 also contributed to more overseas trips.
The proportion of overseas spending out of the total household spending has exceeded the 4 percent level in the third quarter for the first time with 4.3 percent, climbing from 2-3 percent ranges in the 2000s.
The discrepancy between high overseas spending and low domestic consumption does not necessarily mean that the income gap between the haves and have-nots has widened, noted Lee Geun-tae, senior research fellow at the LG Economic Research Institute.
“It is hard to say the gap typically widened in the third quarter. Rather, the reason people don’t spend on local tourism is that domestic leisure and culture industries are too weak to offer quality services that are attractive enough to spend people’s increased income,” Lee said.
Even though the Korean economy is in the low growth trend, a slight increase in household income seems to have encouraged people to seek higher quality in leisure overseas, he said.
Foreigners’ spending in Korea declined 14 percent to 3.9 trillion won in the third quarter from the previous quarter, BOK data showed.
By Kim Yoon-mi (yoonmi@heraldcorp.com)