The income gap between Korean households and companies has widened over the past five years to indicate that despite the country’s robust economic growth, individuals do not have more to spend, data from the central bank showed Monday.
Local companies’ disposable income grew more than 80 percent between 2008 and 2013 to record an annual 16.1 percent average growth.
This compares with an annual 5.3 percent average growth of disposable income at local households.
Consequently, while companies were found to be hoarding cash by minimizing dividend payouts and refraining from making new investments or hiring more people, individual Koreans appeared to be faced with stagnant wages and that much less to spend.
The figures also showed that as of 2012, the ratio of Korea’s per capita personal gross disposable income ― household income that is readily disposable ― was below the average of 21 nations of the Organization of Economic Cooperation and Development.
The central bank declined to comment on data from the remaining 13 OECD countries.
The ratio stood at 57 percent in 2009, meaning that 57 percent of the gross national income consisted of household income. But the figure declined to 55 percent in 2010, and in 2013 inched up to 56.1 percent.
The central bank currently forecasts that the Korean economy will grow 4 percent this year. Facility investment is expected to rise 5.7 percent in 2014 after contracting 1.5 percent in 2013.
By Oh Kyu-wook (email@example.com)