Gap between rich, poor widening

Consumer confidence remains low this year but the downward economic slide seems to be leveling off as the financial market stabilizes. At the same time, the gap in living standards between rich and poor appears to be even wider than it was during the foreign currency crisis of 1997-98. According to the Samsung Economic Research Institute on Sunday, so far this year the consumer confidence index has risen 1.9 points to 43.1 from the last three months of 2000. The consumer confidence index is calculated based on a random nationwide survey of 1,000 households. A score below 50 indicates that there are more people who think the economic situation has improved than those who don`t. Meanwhile, the living standard index, a component of the consumer confidence index, fell 2.8 points to 40.9 from the last quarter of 2000. The present economic situation opinion index dropped from 28.4 to 23.9. The inflation expectation index also rose to 78.3 from 77.1 in the last quarter of 2000, an indication of persistent fears of inflation. By income class, the living standard index for high-income earners stood at 48.7 but for lower income earners, it was only 30.0. The disparity thus widened to 18.7 points, higher than that at the height of the foreign currency crisis in the second quarter of 1998.

Hong Chan-Sun hcs@donga.com