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Spending by South Korean households on food and other groceries surged to the highest level in 11 years in the first half of this year amid a prolonged economic slump, data showed Tuesday.
According to the data released by the Bank of Korea, the country's total household spending rose 4.7 percent from a year earlier to nearly 324 trillion won ($298 billion) in the January-June period.
Of the total, the amount spent on food and non-alcoholic beverages came to 44 trillion won, up 6.3 percent from the same period last year. The amount spent on food accounts for 13.6 percent of total spending by households, which is the highest since the second half of 2000 when the portion came to 14 percent.
Increased spending on food shows an apparent rise in prices, but also worsening sentiments of households and consumers, which in the long run could lead to a contraction of their spending.
"From an economic perspective, the rise was mostly caused by the economic downturn," said a researcher from Hyundai Research Institute, a private think tank. "Market conditions felt by households especially worsened over the past few years as global prices of food and farm products increased significantly."
Apparently, consumers are already spending less on unnecessary items.
The amount spent on alcoholic beverages and tobacco in the first half of the year accounted for 2.13 percent of total spending by households, which is the lowest since such data began to be compiled in 1970.
Spending on clothes also dropped to 5.1 percent of the total from 5.5 percent in the fourth quarter of 2007 with the amount spent on private education also shrinking from 7.7 percent in late
2008 to 6.6 percent in the second quarter of this year, according to the data.
"Despite an increase in household income, people are cutting down their spending on items that are not absolutely necessary.
This reflects the difficult economic conditions felt by the people," said an analyst from LG Economic Research Institute.
Statistics Korea earlier reported the country's average monthly income of households reached 4.14 million won in the third quarter, up 6.3 percent from the same period last year. (Yonhap News)
According to the data released by the Bank of Korea, the country's total household spending rose 4.7 percent from a year earlier to nearly 324 trillion won ($298 billion) in the January-June period.
Of the total, the amount spent on food and non-alcoholic beverages came to 44 trillion won, up 6.3 percent from the same period last year. The amount spent on food accounts for 13.6 percent of total spending by households, which is the highest since the second half of 2000 when the portion came to 14 percent.
Increased spending on food shows an apparent rise in prices, but also worsening sentiments of households and consumers, which in the long run could lead to a contraction of their spending.
"From an economic perspective, the rise was mostly caused by the economic downturn," said a researcher from Hyundai Research Institute, a private think tank. "Market conditions felt by households especially worsened over the past few years as global prices of food and farm products increased significantly."
Apparently, consumers are already spending less on unnecessary items.
The amount spent on alcoholic beverages and tobacco in the first half of the year accounted for 2.13 percent of total spending by households, which is the lowest since such data began to be compiled in 1970.
Spending on clothes also dropped to 5.1 percent of the total from 5.5 percent in the fourth quarter of 2007 with the amount spent on private education also shrinking from 7.7 percent in late
2008 to 6.6 percent in the second quarter of this year, according to the data.
"Despite an increase in household income, people are cutting down their spending on items that are not absolutely necessary.
This reflects the difficult economic conditions felt by the people," said an analyst from LG Economic Research Institute.
Statistics Korea earlier reported the country's average monthly income of households reached 4.14 million won in the third quarter, up 6.3 percent from the same period last year. (Yonhap News)
