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This year’s household savings rate is expected to show the highest level since 1999.
An increase in the household saving rate can have positive effects, such as an increase in corporate investment resources, but rather a contraction in consumption can intensify the economic recession.
▲ According to statistics from the monthly survey released by the Bank of Korea on the 29th, this year’s household savings rate is expected to reach its highest level since 1999.
In the monthly survey statistics report released by the Bank of Korea on the 29th, manager Lee Yong-dae and researcher Lee Chae-hyun predicted that “there is a possibility that the household saving rate will rise and level up to cause of the Corona crisis 19 “.
The household saving rate peaked at 23.9% in 1988 and then dropped sharply until the mid-2000s due to changes in the structure of consumer spending and the expansion of pension systems. In 2002 it fell to 0.1%.
When the economic crisis erupted, there was a temporary increase. In the aftermath of the financial crisis, the household saving rate increased dramatically from 13.1% in 1997 to 20.4% in 1998.
The Bank of Korea has predicted that the household saving rate could rise to around 10% this year due to the short-term contraction in consumption due to the spread of the 19 Crown. This is 4 percentage points higher than in the previous year. household savings rate in 2019 of 6.0%.
1999 (13.2%) was the last time that the annual savings rate of households exceeded 10%.
Director Lee said: “This year’s rise in household savings rates is attributed to the decline in consumption of face-to-face services due to the strengthening of social distances.” I looked out.
The savings rate in the United States rose to 33.6% in April this year, when restrictions on movement were tightened, and dropped to 14.3% in September.
However, it was analyzed that if the economic slowdown caused by Corona 19 continues, households’ propensity to save could increase due to a decrease in expected future income and an increase in credit constraints.
“Rising household savings rates can lead to a prolonged slowdown in consumption and weaken the effect of stimulating domestic demand in macroeconomic policies,” Lee said. I looked at it.
He added that “political efforts are needed to alleviate structural factors such as the deterioration of household income conditions which can lead to an increase in the household saving rate”. [비즈니스포스트 남희헌 기자]
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