Value context and insight. lkm@koreatimes.co.kr
Heat waves, cold snaps, heavy downpours lead to slower spending: BOK
A road in a residential area remains submerged due to heavy rain in Daejeon, Sept. 17. Yonhap
By Lee Kyung-min
Unusual climate events, including heat waves, cold snaps and heavy rain, led to a slower credit card spending, a Bank of Korea (BOK) report showed Monday.
Card spending declined 7 percent during heat waves, 3 percent during cold snaps and 6 percent during heavy rainfalls when compared to normal days. Spending on in-person services such as dining out fell by 5 percent, 6 percent and 9 percent, respectively.
Fridays saw the highest overall card spending, the report said, adding that Saturdays were when most in-person spending was concentrated. Weekday spending was more concentrated in business-related sectors such as health care and education.
It also identified a “pent-up demand” effect whereby rain led to delayed spending rather than its outright cancellation. Spending increased above normal levels once the weather improved.
Per-day household spending from Monday to Thursday averaged 144,000 won ($102), while the figure stood at 151,000 won on Fridays. It slid to 116,000 won on Saturdays and 92,000 won on Sundays.
The report showed the weather impact was more pronounced on Fridays and Saturdays.
On those days, rain caused an 8 percent drop in overall card spending compared to normal days, sharper than the average 6 percent drop on the four remaining weekdays when it did not rain.
In-person shopping and dining out dropped 8 percent and 11 percent, respectively, on rainy Fridays and Saturdays, a slight increase from the 7 percent and 10 percent declines on the four other weekdays without rain.
The report concluded that extreme weather conditions in the first three months of this year and the June-August period translated to a drop of 0.18 percentage points in annual private consumption growth.
However, the drop in the annual figure was limited to 0.09 percentage points, offset in part by comparatively less severe rainfall during the same period.