Half of households spent over W2 mil. a month in 2010

By Kang Seung-woo

For the first time, more than half of Korean households spent more than 2 million won ($1,780) per month last year, as income and consumer prices rose amid economic recovery, the statistical office said Wednesday.

According to Statistics Korea’s analysis on consumer expenditure, 53.7 percent of the country’s households spent more than 2 million won a month on average in 2010.

The number is up 6.12 percentage points from the preceding year and the year-on-year growth marked the largest increase in monthly expenditure of more than 2 million won, surpassing the previous high of 5.16 percentage points recorded in 2008.

Consumer expenditure includes basic living costs and other expenses for goods and services, but not tax, social insurance, pension and interest payments.

The proportion of households with a monthly expenditure of more than 2 million won has been on the rise.

Consumer expenditure of 2 million won per month eclipsed the 30 percent mark for the first time in 2004 at 32.63 percent and reached the 40 percent level in 2007 at 42.05. The figure reached 47.1 percent and 47.59 percent, respectively, in 2008 and in 2009.

The state-run agency said that the nation’s solid economic growth and growing consumer prices led to the increased spending.

Korea’s economy tallied an 8-year high of 6.1 percent growth last year on the back of rapid growth in the manufacturing sector and gains in exports and investments, compared with a 0.2 percent expansion in 2009.

In addition, mounting inflationary pressure is keeping consumers’ wallets open.

According to the agency, the country’s consumer price index jumped 4.5 percent last month from a year ago, marking the steepest growth since November 2008. The figure is higher than the 4.1 percent spike in January, and it also stayed much higher than the government’s 2011 inflation target of 3 percent.