South Korean household income last year grew at the slowest pace on record and spending fell for the first time, Statistics Korea data released yesterday showed, underscoring the challenge facing policymakers as they try to ignite a sluggish economy.
Households’ average monthly income last year increased 0.6 percent from 2015 to 4.4 million won (US$3,890), the smallest gain since the office began compiling the data in 2003.
South Korean households’ consumption expenditure dropped 0.5 percent, with larger drops seen in transportation and clothing expenses, the data showed.
The weakness in household income reflected slowing growth amid a political scandal that has led to the impeachment of South Korean President Park Geun-hye. The situation worsened in the fourth quarter, when the scandal erupted, with income growth slipping to 0.2 percent from a year earlier and spending falling 3.2 percent.
The country’s economy expanded 0.4 percent quarterly in the fourth quarter, the slowest pace in more than a year.
While exports are faring better than expected as the global economy improves, consumption is falling short of forecasts and sentiment remains poor, the Bank of Korea said on Thursday.
The central bank forecast the economy would grow 2.5 percent this year, the slowest pace since 2012.
The tepid income growth last year was due to “job growth slowing on a delay in the economic recovery and corporate restructuring,” the South Korean Ministry of Strategy and Finance said in a separate statement yesterday.
Household spending as a percentage of disposable income, excluding items like taxes and pensions, fell to 71.1 percent, also the lowest on record going back to 2003, data showed.
“Spending is typically large for households with children, and the low birth rate and aging are factors we see as decreasing consumption,” Statistics Korea official Kim Bo-kyoung said in a news briefing in Sejong.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in server chips, expects revenue to decline this year due to sagging demand for 5-nanometer artificial intelligence (AI) chips from a North America-based major customer, a company executive said yesterday. That would be the first contraction in revenue for Alchip as it has been enjoying strong revenue growth over the past few years, benefiting from cloud-service providers’ moves to reduce dependence on Nvidia Corp’s expensive AI chips by building their own AI accelerator by outsourcing chip design. The 5-nanometer chip was supposed to be a new growth engine as the lifecycle
RSS