The total household income of the second quarter of 2023 decreased by 0.8% due to the base effects of the income growth in the same period of last year (up 12.7%, the record high figure) and a waning effect of the COVID-19 support funds. The total income fell due to the substantial decline in transfer income (down 19.6%) driven by the end of the government compensation for financial loss of small business owners and a disaster relief fund despite a steady increase in the income earned from labor (up 4.9%) on the back of employment growth.
As for the first quintile, despite a sharp increase in the income from business operations, total income slightly decreased as earned and transfer income plunged. In the fifth quintile, earned income rose while business and transfer income dropped, leading to a decrease in total income.
Consumer spending climbed (up 2.7%) primarily in sectors such as food and accommodation, transportation and entertainment and culture due to the easing of COVID-19 restrictions but personal saving (disposable income minus consumption) plummeted (down 13.8%).
The income quintile share ratio stood at 5.34, which fell compared to the same period last year (down 0.26 points). However, the official assessment of income distribution improvement can be determined through the 2023 Survey of Household Finances and Living Conditions.
The government plans to strengthen employment and social safety nets for vulnerable groups to ensure continuous improvement in household income and distribution. At the same time, it will respond vigorously to address price fluctuations and damages caused by heatwaves and heavy rains aiming to prevent a disproportionate impact on vulnerable groups.
Source: Ministry of Economy & Finance, Republic of Korea (Source)
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