This file photo from Nov. 6, 2022, shows people walking on the streets of Myeongdong in central Seoul. (Yonhap)
SEOUL, Nov. 22 (Korea Bizwire) — The deepening economic slowdown is attributed to the shrinking consumption of the “MZ generation,” a Korean term referring to those aged between late 10s and 30s, on hobby and leisure activities following the 2008-09 global financial crisis, a central bank report said Monday.
The Bank of Korea said in a report that South Korean consumption has weakened in terms its function as a buffer for the economic downturn, as the country has gone through a currency crisis and a global financial crisis.
It is common for consumption to maintain a stable flow, working as a buffer against fluctuations in economic growth.
Ever since the 2000s, however, consumption has been suffering, with household consumption failing to keep pace with growth in gross domestic product (GDP).
The report said that the MZ generation has cut back on dining out, car maintenance, leisure and entertainment, communication services, and other durable goods ever since the onset of the global financial crisis, which has resulted in a fragile household income and asset base, as well as rising debt.
The pre-baby boom generation cut back on selective consumption amid the slow accumulation of financial assets and rising income uncertainty following retirement.
“The MZ generation is largely interested in hobby and leisure activities, and spends more on them,” the report said.
“Without alternatives for changing the structure of consumption, it is expected to drop even further during the economic downturn,” the report said.
M. H. Lee (mhlee@koreabizwire.com)
