Propensity to consume among South Korean people declined to the lowest last year, boosting concerns about faltering private consumption amid lower household income, a government report showed Friday.
Consumption propensity, which gauges a ratio of household consumption to disposable income, posted 71.9 percent in 2015, the lowest since the data began to be compiled in 2003, according to Statistics Korea.
The figure kept falling for five straight years since 2011. The downward trend was expected to continue for the time being as consumers are bearing a big burden for debt repayment amid record-breaking household debts.
The policy rate, staying at an all-time low of 1.5 percent for eight straight months, increased mortgage and credit loans. The rapid population-aging encouraged consumers to save money rather than spend, while youths even don't have enough money to spend due to fast growth in youth unemployment.
Monthly average income per household was 4,373,000 won (3,532 U. S. dollars) in 2015, up 1.6 percent from a year earlier. It was the slowest increase since 2009 when the global financial crisis erupted. Household income adjusted for inflation rose 0.9 percent last year.
Monthly household spending averaged 2,563,000 won in 2015, up 0. 5 percent from the previous year. The inflation-adjusted household expenditure reduced 0.2 percent.
Fuel costs declined 5.7 percent thanks to lower crude oil prices, but residence costs surged 20.8 percent amid higher housing rentals.
Spending for cigarette and liquor jumped 18.8 percent due to the government's hike in cigarette prices, with food and beverage expenditure gaining 0.8 percent.
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