Annual growth of South Korean households‘ monthly income picked up in the second quarter from three months earlier, but their spending still remained weak, a government report showed Friday.

Households’ monthly income averaged 4.04 million won ($3,608) in the April-June period, up 2.5 percent from a year earlier, according to the report by Statistics Korea. In the first quarter, household income grew 1.7 percent on-year.

Inflation-adjusted household income rose 1.3 percent last quarter, quickening from a 0.3 percent on-year gain three months earlier, it showed.

The data came as the South Korean economy grew 1.1 percent on-quarter in the April-June period, the fastest growth in more than two years, due to increased fiscal spending.

The government and the central bank expect the local economy to grow 2.7 to 2.8 percent this year.

The on-year growth of monthly household income picked up last quarter, but the second-quarter growth rate was still far lower than an average of some 6 percent seen in the 2010-12 period, the data showed.

Consumption expenditure ― household spending on services and products ― grew 0.7 percent on-year in the second quarter, a turnaround from a 1 percent on-year decline in the first quarter.

In the January-March period, consumption expenditure posted the first on-year decline since the 3.6 percent fall in the first quarter of 2009.

Despite signs of economic recovery, domestic demand remains weak as consumers refrain from spending money amid economic uncertainty and a pile-up in household debt.

The ratio of consumption expenditure against disposable income came in at 73.1 percent in the second quarter, down from 75 percent three months earlier, according to the statistics agency.

Household disposable income ― total income minus non-consumption spending ― rose 2.1 percent on-year to 3.29 million won. The growth rate is still far lower than an average of around 5.8 percent growth seen in the 2010-12 period. (Yonhap News)