Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Interest payments outpace spending on clothes
T-shirts and other clothingware are on a display at a deparment store in Seoul, Nov. 5. Yonhap
By Yi Whan-woo
Households in Korea are spending more to pay interest on bank loans than on clothes and shoes, adding to concerns over costly borrowing rates that weigh on the high cost of living, data showed, Wednesday.
According to Korean Statistical Information Service (KOSIS), a website run by Statistics Korea, households one person or more spent an average 114,900 won on monthly interest payments in the third quarter of 2023. The amount was an increase from 95,500 won the previous year.
The data showed Korean families in return are spending less on clothing to save money,
The monthly expenses for buying clothes and shoes averaged 104,000 won in the July-September period, down from 117,700 won a year earlier.
It marked the first time that interest payments outpace expenses for clothes since 2006 when the relevant data started being compiled.
“The high interest rate and high cost of living are indeed affecting the people’s livelihoods,” Statistics Korea said, noting the Bank of Korea’s (BOK) benchmark interest rate has stood near a 14-year high of 3.5 percent since January.
It also noted that consumer inflation remained in the 3 percent range for the fourth consecutive month in November, after easing to a 25-month low of 2.3 percent in July.
“People are cutting spending on goods that do not immediately affect their daily life, and that turns out to be clothing,” the stats agency said.