No Change in Real Income for 3 Quarters

The rate of increase of real Gross National Income (GNI) has remained in the 0% range for the third consecutive quarter. This means that the money people can actually spend has not increased, and that the economic recovery, though real, is not being felt by the people.

The Bank of Korea announced Friday that Korea’s real GNI for the third quarter (July to September) was 165.96 trillion won, a 0.1% increase year-on-year.

Last year, real GNI growth rate was 3.8% but the figure has barely moved this year, with a 0.5% change in the first quarter (January to March) and 0.0% movement in the second (April to June), followed by another negligible change in the third quarter.

On the other hand, real GDP grew by 4.5% in the third quarter year-on-year, which was the highest growth rate since the 4.7% in the third quarter of 2004.

The reason the increase in production is not being translated into a boost in income lies in the outflow of capital due to real trade losses caused by worsening trade conditions.

Real trade losses for the third quarter were 12.42 trillion won. The accumulated loss for the first nine months of this year amounts to a whopping 32.86 trillion won.

Suk-Min Hong smhong@donga.com