Household spending on food gains in 2009

SEOUL, Dec. 22 (Yonhap) -- Household spending on food in South Korea rose to an
eight-year high in the first nine months of the year, a sign of their diminished
purchasing power, data by the central bank showed Tuesday.

The so-called Engel's coefficient, which measures the proportion a family spends
on food to its total income, reached 13 percent in the January-September period,
up 0.7 percentage point from the same period last year, according to the data by
the Bank of Korea (BOK). The latest figure marks the highest level since the 13.4
percent logged in 2000, the data showed.
The coefficient is often used to measure a country's living standards. Growth in
household income usually results in a reduction in the gauge.
The central bank data showed nominal household income grew 2.4 percent on-year to
408.8 trillion won (US$344.8 billion) during the cited period while the cost of
edible products jumped 7.8 percent to 53.4 trillion won.
Analysts note that a gain in food spending, which is indispensable and difficult
to adjust, could stifle consumption in other sectors.
"Sluggish household income, coupled with rising food prices, could become a
restraining factor in a consumer economic recovery next year as it erodes
middle-class purchasing power," said Yu Byoung-gyu, an economist at the Hyundai
Research Institute.
pbr@yna.co.kr
(END)

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