Koreans spend more income on food

Korean families spent an increased portion of their income on food -- the highest in eight years -- in the first half of this year, largely due to an increase in food prices, data showed yesterday.

According to the Bank of Korea, the Engel coefficient -- the proportion of household income spent on food -- came in at 12.5 percent in the first six months of 2009, up 0.8 percentage points from a year earlier.

It is the highest level since the first half of 2001 when the figure stood at 12.7 percent.



The central bank said Korean households` total spending rose 2 percent to 269.7 trillion won during the first half of this year.

Expenditures on food and non-alcoholic beverages posted a 9.1 percent jump from 30.9 trillion won to 33.7 trillion won.

"The upturn in the Engel coefficient is largely driven by the sharp rise in food prices this year," a central bank official said. Prices for food and non-alcoholic beverages climbed 10.7 percent in the first half.

Real spending on food, adjusted for the change in prices, dropped 0.9 percent.

The Engel coefficient tends to drop when incomes increase; a low Engel number indicates a higher standard of living. The measure for the first half has steadily declined in Korea from 12.7 in 2001 to 11.6 percent in 2007.

On average, a Korean household spent 1.99 million won on food and non-alcoholic beverages in the first six months, which was 140,000 won more than last year`s average of 1.85 million won. Meanwhile, families spent 1.18 million won on education during the period, up from 1.16 million won in 2008. The average expenditure on medical treatment and healthcare came in at 1.03 million won, up from 950,000 won a year ago. (milaya@heraldm.com)





By Lee Sun-young