S. Korea's consumption propensity falls to record-low despite income growth

Consumption propensity in South Korea fell to a record low in the first quarter due to delayed consumer expenditure amid aging population that offset income growth, a government report showed Friday.

Propensity to consume among households, which measures consumption to disposable income, averaged 72.3 percent in the first quarter, down 2.1 percentage points from a year earlier, according to Statistics Korea.

It was lower than any first-quarter figure since the statistical agency began compiling the data in 2003. The figure means consumers spent 72.3 percent of their disposable income during the quarter.

The number continued to fall from 75.9 percent in 2008, when the global financial crisis erupted, to 74.1 percent in 2012 and the annual record low of 73.4 percent in 2013.

The downward trend came as consumers delayed consumption on worries about after-retirement life amid rapid population aging though household income increased.

Per-household disposable income gained 3 percent in the first quarter from a year earlier. The disposable income refers to a total income minus non-consumption expenditure, including tax and pension payments.

Surplus among households, or disposable income minus consumption expenditure, topped 1 million won (920 U.S. dollars) for the first time.

The monthly average household income rose 2.6 percent during the quarter, and the household income adjusted for inflation climbed 2 percent.

The monthly expenditure among households inched up 0.2 percent in the first quarter, much lower than the pace of income growth. Endi