Korean households boosted savings during Covid-19

Bank of Korea headquarters in central Seoul [YONHAP]

Korean households saved an additional 100 trillion won ($77.7 billion) or more during the Covid-19 pandemic due to reduced consumption and increased government support, a central bank report showed Monday.

Excess savings made from 2020-2022 totaled between 101 trillion won and 129 trillion won, according to the report published by the Bank of Korea (BOK).

The BOK defines excess savings as the amount of savings arising from above-trend savings rates in the pre-pandemic era.
The figures accounted for 4.7 percent to 6 percent of the country's nominal GDP and 9.7 percent to 12.4 percent of private spending during the period.

The BOK attributed the increase in excess savings to less spending by households amid the pandemic and an increase in household income last year thanks to favorable employment situations and government support.

The central bank report said households seemed to hold the excess savings largely in the form of liquidable financial assets, including bank deposits and stocks.

According to BOK data, domestic households' financial assets increased by over 1 quadrillion won between 2020 and 2022, almost twofold the 591 trillion won tallied between 2017 and 2019.

Yonhap