By Lee Hyo-sik
Staff Reporter

Korean parents spent a record amount of money on education-related items and services for their children in the first half of the year despite soaring inflation and slowing income growth. With surging global oil prices, families also had to pay more to move around, pushing up households' transportation-related expenditure to an eight-year high.

According to the Bank of Korea (BOK) Sunday, the nation's education spending totaled 15 trillion won in the first six months of the year, up 9.1 percent from 13.8 trillion won in the same period last year. It is the largest increase since 2003 when households' education costs jumped 11.3 percent.

The 15-trillion won expenditure accounted for 6.2 percent of the entire 244-trillion won in household spending during the January to June period, up 6.1 percent from a year earlier.

``Consumers have tightened their belts in recent months as soaring oil and other imported commodity prices sharply raised costs of goods and services. Families also reduced overall spending amid slow income, with many having to pay higher interests on mortgages and other loans amid rising market rates,'' a BOK official said. In fact, private spending, one of Korea's main growth engines, fell 0.2 percent in the April to June period from the previous quarter, the first quarter-to-quarter decline since the second quarter of 2004.

But high inflation and low wage growth have failed to dampen Korean parents' fever for their children's education. ``To finance rising cost of reference books, stationery, school tuition and private tutoring, consumers cut back on dining out and other household expenses,'' the official said.

Additionally, skyrocketing oil prices made it more expensive for families to drive private vehicles as well as use public transportation. The central bank said households spent a total of 28.7 trillion won on transportation in the first half, up 11.4 percent from 25.7 trillion won a year ago. It marked the highest year-on-year growth since 2003 when the costs jumped 13.3 percent.

Families were also forced to pay more for food and other living necessities due to rising consumer prices as a result of the increased oil and other imported commodity costs. Spending on food items and beverages rose 8.5 percent to 35.5 trillion won from the previous year, the largest increase since 2000.

However, households refrained from purchasing non-essential goods, including alcohol and cigarettes, weighed down by low wage growth and high prices.

Consumers bought alcohol and cigarettes worth 5 trillion won in the first six months of the year, up only 3.6 percent from the same period last year. This accounted for 2.1 percent of total household expenditure, down from 2.2 percent last year. People also spent a smaller portion of the family budget on dining-out, lodging, as well as clothes and shoes.

leehs@koreatimes.co.kr