Six out of 10 households in the bottom 20 percent income group in South Korea remained as hard up as a year ago as of the first quarter whereas the country’s household deficit situation slightly improved broadly over the year.
According to data released by Statistics Korea on Tuesday, 24.6 percent of Korean households were in deficit in the January-March period, down 1.8 percentage points from 26.4 percent in the same period a year ago. A deficit household refers to a family whose spending is higher than disposable income or income left over after taxes.
The ratio of deficit households against total households fell on year in the first quarter but it varied depending on income groups.
The ratio fell in households in the top 80 percent bracket – by 2.8 percentage points to 27.2 percent in the bottom 20 to 40 percent group, by 3.2 percentage points to 15.8 percent in the middle 40 to 60 percent group, 1.2 percentage points to 12.0 percent in the top 20 to 40 percent group, and 1.8 percentage points to 7.4 percent in the top 20 percent group.
The deficit ratio for households in the bottom 20 percent group, however, remained unchanged from a year ago, with more than six households still living in the red, which is eight times that of the top 20 income bracket.
Experts noted that overall economic conditions improved in the top 80 percent income group thanks to a recovery in the economy from the Covid-19 fallout.
The bottom 20 percent households saw disposable income gain by the largest among all groups but their spending also surged the most.
Their disposable income jumped 11.6 percent to 728,000 won ($658), higher than a 5.6-percent growth in the bottom 20-40 percent group, 5.1 percent in the middle 40-60 percent group, and 2.2 percent in the top 20-40 percent group, and -3.4 percent in the top 20 percent group.
The spending in the bottom 20 percent households, however, gained 9.8 percent to 1.125 million won – higher than other income groups at 2.3 percent, 5.7 percent, -1 percent, and -0.7 percent, respectively.
The bottom 20 percent households spent 397,000 won more in general, up 6.7 percent from a year ago. Households in other income brackets earned 294,000 won, 763,000 won, 1.5 million won, and 3.3 million won, respectively.
By Lee Eun-joo
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]