Expenditure drastically reduced’recession-type surplus’… “In the future, retaliation may explode
Ironically, last year, when the new coronavirus infection (Corona 19) had experienced extreme difficulties, the scale of the household surplus recorded the highest level in history.
The government’s disaster subsidies managed to return household incomes to positive, but it was a so-called’recession-type surplus’ that emerged as economic actors rapidly reduced spending in crisis situations.
According to the results of the National Statistical Office’s household trend survey on the 21st, the surplus rate of households nationwide (two or more) last year was 32.9% in the first quarter, 32.3% in the second quarter, 30.9% in the third quarter, and 30.4 in the fourth quarter, all exceeding 30%.
In the household trend survey prepared since 2003, only five times have households recorded a quarterly surplus of 30% or more.
All occurred last year, except for one 30.3% in the fourth quarter of 2016.
Considering that the general household trend is compared to the same period last year, this means that it recorded a record-high surplus every quarter last year.
The surplus rate refers to the percentage of money remaining after spending and spending out of the money earned by households.
Disposable income is the amount excluding non-consumption expenditures such as taxes, pensions, social insurance premiums, and interest expenses from income, and it becomes a surplus after subtracting everyday expenses for food, clothing, and shelter.
The surplus rate is the share of the surplus in disposable income.
The increase in household surpluses last year is not a result of earning more, but a result of not spending or not using it, namely, the result of a recession-type surplus.
Professor Yoo Gyeong-won of Sangmyung University explained in a recent report on’Comparison of consumption expenditure patterns during the past economic crisis and the spread of Corona 19′, “When a crisis occurs, households tend to see a greater decrease in consumption than a decrease in income.”
The greater the fear of declining income, the greater the breadth of consumption and expenditure.
Expenditures contracted even more as the demand for preliminary savings in preparation for the instability of future income and the mechanical decrease in current income decreased.
This was most noticeable in the first quarter of last year, which recorded the highest surplus.
The average monthly income per household increased by 3.7% to 5358,000 won, but household expenditure decreased by 4.9% to 3945,000 won.
The average household income increased by 4.8% in the second quarter, 1.6% in the third quarter, and 1.8% in the fourth quarter.
Household spending decreased by 2.2% in the third quarter and 0.1% in the fourth quarter, except for an increase of 1.4% in the second quarter.
In the case of the COVID-19 outbreak, compared to the past economic crisis, the average household income is also different.
The universal and selective disaster subsidies provided by the government also seem to have had a significant impact.
The average household income has somehow increased, but the surplus rate has risen because expenditures have fallen significantly.
From historical experience, the surplus stockpiled during a crisis often leads to explosive consumption after escaping from the crisis.
It is so-called retaliation consumption.
Professor Gyeong-won Yoo said, “The increased liquidity in the process of responding to Corona 19 and the way consumption and savings, which collapsed amid the overheating of the asset market, will change the economic movement.” There is a risk of losing,” he said.
/yunhap news