This file photo, taken Oct. 3, 2021, shows signs on a bank’s loan programs that were put up on the exterior of a lender in Seoul. (Yonhap)
SEOUL, Oct. 31 (Korea Bizwire) — An increasing number of households are facing a heavier burden when it comes to interest payments with both consumer prices and interest rates rising rapidly, a local research institute said Sunday.
Hyundai Research Institute, in an analysis of Statistics Korea data, said 35.7 percent of all households in the country have been paying a certain amount of interest in the first half of this year, up by 0.9 percentage points from last year.
The number of households paying interest has been going uphill since early 2020 (31.8 percent).
The average amount of interest paid monthly by households this year was 230,000 won (US$161), up by 2.2 percent from last year.
The propensity for consumption among interest-paying households was 66.6 percent, down by 5.9 percentage points from last year, indicating shrinking consumption.
The propensity for consumption among households that do not pay any interest was 65.5 percent, down by 3 percentage points from last year.
The increase rate in real consumer spending was 2.5 percent for households that do not pay any interest. In contrast, the rate was -2.4 percent for interest-paying households.
“If increasing consumer prices and interest rates continue, consumption will drop significantly among interest-paying households,” said senior researcher Shin Ji-yeong.
H. M. Kang (hmkang@koreabizwire.com)
