Food spending eating into Koreans’ incomes
The percentage of income spent on food hit a 17 year high from January through September based on data compiled by Korea’s central bank. Spending on food accounted for 13.8 percent in 2017, 0.2 percent up from the previous year.
Korea saw food spending fall between 2000 and 2007, but the index started rebounding in 2008.
In 2007, food spending stood at 11.8 percent of income spent, but it rose to 12 percent the following year and 13 percent in 2011.
The Bank of Korea said that households spent a total of 573.6 trillion won ($537.3 billion) during the January-September period, up 3.3 percent from a year earlier.
Of the total spending, household spending on food items rose 4.7 percent year-on-year to 78.9 trillion won.
Chun Sung-in, an economics professor at Hongik University, said the figure showed that households tightened their belts last year, with middle- and low-income earners appearing to experience a decline in their income.
The popularity of healthier and upscale food also contributed to the rise in spending, said Hong Jun-pyo, a researcher at Hyundai Research Institute.
“The changing food consumption habit could be a factor with more people looking for wholesome recipes and food,” the researcher said.
But others put more weight on stagnant salaries.
“It remains the same that we eat three times a day,” said Kim Jung-sik, an economics professor at Yonsei University.
“But the rising costs highlight that household income didn’t actually rise.”
Last year, consumer prices grew 1.9 percent from a year earlier, sharply up from a 1 percent year-on-year rise in 2016, the steepest gain since 2012.
Core inflation gained 1.5 percent in 2017, the slowest pace of increase in 18 years.
The finance ministry expects Korea’s inflation to rise 1.7 percent this year.
At the same time, the growth of income remains tepid until recently.
The growth rate of average monthly salary was less than 1 percent between the third quarter in 2015 through the second quarter in 2017.
But the third quarter of last year shows a glimmer of hope as it posted a 2.5 percent rise.
BY PARK EUN-JEE, YONHAP [firstname.lastname@example.org]