Household cash surplus in S.Korea hits record high in 2015

Cash surplus among South Korean households hit a record high in 2015 as consumers refrained from spending money on concern about after-retirement life and uncertain economic conditions, central bank data showed on Thursday.

Money surplus held by households, which gauges investment into deposits, insurance and stocks minus borrowed money, amounted to a new high of 99.2 trillion won (86.7 billion U.S. dollars) in 2015, up 5.7 trillion won from a year earlier, according to the Bank of Korea (BOK).

The cash surplus continued an upward trend as consumers showed reluctance on spending as seen in the record low of 71.9 percent last year in consumption propensity among households.

Economic uncertainties and concerns over after-retirement life amid the rapidly aging population resulted in reluctance to consume and willingness to save.

The net savings rate in households reached 7.7 percent in 2015, the highest in 15 years since 8.4 percent tallied in 2000.

The high savings rate came despite record-low interest rates, indicating a severe anxiety among consumers over economic conditions.

The central bank cut its benchmark interest rate in March and June last year by a quarter percentage point each to an all-time low of 1.5 percent. Endit