S. Korea's income, spending shrinks three quarters in a row

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SEOUL, Aug. 28 (Yonhap) -- South Korean household income and spending shrunk for
the third straight quarter between April and June this year amid the worldwide
economic slump, a government report showed Friday.

Average real income, adjusted for inflation, slipped to 2.92 million won
(US$2,340) for that period, down 2.8 percent from the same three-month period a
year earlier, according to the report by the National Statistical Office (NSO).
Spending also contracted 1.1 percent to 1.85 million won as families tightened
their purse strings.
Both figures have been heading downhill since the fourth quarter of last year.
The latest report also showed nominal household income, which does not account
for inflation, posted minus 0.1 percent growth on-year in the second quarter,
with spending falling 1.7 percent annually.
"The 0.1 percent contraction is the first tallied since the NSO started
announcing such figures in 2004," Eun Sun-hyun, head of the office's social
welfare statistics division.
Average nominal income and spending during the quarter reached 3.29 million won
and 2.66 million won, respectively. Average household balance sheets were in the
black by 636,000 won, a 6.9 percent drop from a year earlier.
Disposable income also shrunk by 0.7 percent for the first time since related
data began being collected, due mainly to lower income and higher non-consumer
spending on taxes, social welfare costs and interest payments.
Eun said there are signs that income and spending are making a gradual comeback
as the economy starts to regain some momentum. The director predicted that
figures may be more positive for the third quarter.
Economic indicators have shown in recent months that while the economy is still
reeling from the fallout triggered by Lehman Brothers' collapse last year,
exports, production and investment appear to be on the mend.
The NSO report, meanwhile, said that people spent more on groceries, housing,
education and medical outlays vis-a-vis the year before, while cutting back on
alcohol, clothing, and transportation-related expenses.
The report was based on surveys conducted on 9,000 households with more than two
people nationwide.
yonngong@yna.co.kr
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