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Low consumer confidence compared to the time of Sewol ferry disaster

Low consumer confidence compared to the time of Sewol ferry disaster

Posted August. 23, 2015 22:44,   


It has turned out that the consumer confidence was considerably decreased during the second quarter (April to June) as more people tightened their belt from the anxiety caused by economic recession and the outbreak of Middle East respiratory syndrome coronavirus or MERS. With higher disposable income, few households have opened their wallet because of uneasiness for the future.

The household consumption trend survey conducted by National Statistical Office on Friday shows that an average propensity to consume (APC), the portion of consumption out of disposable income, stood at 71.6 percent during the second quarter, the lowest since 2003 when the indicator was counted on the national level. The figure was lower than that of the same period last year when Sewol Ferry disaster occurred by 1.0 percent point, and merely 0.1 percent point higher than that of the fourth quarter in 2014 (71.5 percent) when the indicator was recorded the lowest figure ever.

The survey showed that the expense in almost every area that an individual can make a choice decreased with the exception of consumption for daily necessities such as food, clothing and shelter. The spending for entertainment and cultural experience decreased by 4.4 percent from the same period last year, the largest decrease since the fourth quarter of 2008, immediately after global financial crisis when the figure dropped by 4.6 percent point. The expenses on residence, water supply, light and heat increased to 7.8 percent and the consumption on food to 2.0 percent. Due to tobacco price increase at the beginning of the year, the spending on alcoholic beverage and cigarette went up by 19.8 percent quarter on quarter.

In general, households are turned out to enjoy a bit improved financial status. The disposable income by household stood at 3 million 484,000 Korean won (approx. 2,919 U.S. dollars), 3.1 percent higher than that of second quarter in 2014. When dividing households into five groups according to their earnings, the disposable income of the bottom 20 percent group, meaning the poorest, rose 9.6 percent while the top 20 percent group increased 2.8 percent.