S. Korea's household income growth, spending slump in Q3

SEOUL, Nov. 21 (Yonhap) -- South Korea's average household income grew at a
slower pace in the third quarter of this year amid worsening economic conditions,
a government report showed Friday.

According to the report by the National Statistical Office (NSO), South Korean
households earned a monthly average of 3.46 million won (US$2,282) during the
July-September period, up 5.5 percent from 3.28 million won a year ago.
The growth is lower than a 7.4 percent year-on-year expansion in the same period
of 2007. With adjustment for inflation, household income growth remained
unchanged from a year earlier, the report showed.
"Household income remained almost stagnant amid overall bleak economic
conditions. Such a downward trend will likely last for the time being," said Yang
Sung-goo, director of the NSO's social & welfare statistics division.
South Korea has been gripped by growing concerns that the global financial
turmoil and economic setbacks might send the nation's export-driven economy into
a recession.
Such concerns have deepened as companies are reluctant to hire workers and
consumers cut back on spending due to a bleak economic outlook. In the third
quarter, the country's gross domestic product expanded 0.6 percent from three
months earlier, the slowest in four years
South Korea's consumer prices jumped 4.8 percent in October. The price growth
figure eased for two consecutive months after reaching a 10-year high of 5.9
percent in July. Falling oil and commodity prices have helped lower inflationary
pressure.
Continuing high inflation caused households to spend more on education, fuel and
other necessities, with monthly average expenditures amounting to 2.29 million
won, the report showed.
Household spending on an inflation-adjusted basis, however, contracted 2.4
percent, the lowest since related data was compiled in 2003, reflecting fragile
consumer sentiment, the report showed.
"Runaway inflation led to an overall increase in spending but actually households
seemed to tighten their purse strings for fear of deteriorating economic
situations," Yang said.
According to the report, expenditure on food increased 5.3 percent and spending
on utility services including tap water and electricity rose 5.1 percent.
Education spending also jumped 6.7 percent in the same period.
kokobj@yna.co.kr
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