The Bank of Korea said abnormal weather such as cold snaps, heat waves, and heavy rain lowered this year's annual private consumption growth rate by 0.18 percentage points. In particular, when it rained on Fridays or Saturdays, when spending tends to concentrate, card spending fell more sharply, mainly for in-person consumption.
On the 29th, the Bank of Korea published a BOK Issue Note titled "The impact of weather and day of the week on consumption seen through high-frequency data." The report was written by Jo Byeong-su, deputy head of the Research Department's General Research Team, and Jang Su-jeong, researcher.
The researchers analyzed the impact of weather on consumption using daily card spending and temperature and precipitation data, and estimated the effect of this year's worsening weather on the consumption growth rate.
The analysis showed that during heat waves, cold snaps, and precipitation, card spending decreased by 7%, 3%, and 6%, respectively, compared with normal weather. Offline shopping fell by 1%, 3%, and 6%, and in-person services such as dining out dropped by 5%, 6%, and 9%, respectively. The decline in consumption was larger when it rained than during heat waves or cold snaps.
The researchers explained, "In the case of heat waves and cold snaps, seasonal demand such as vacations and purchases of cooling and heating devices and related supplies increases, which appears to partially offset weather-constrained consumption activities."
By day of the week, when it rained on Fridays and Saturdays, total card spending fell 8% compared with normal weather, a larger drop than on other days (6%). Offline shopping fell 8%, and in-person services such as dining out dropped 11%, widening the decline compared with other days (7%, 10%). By contrast, for heat waves and cold snaps, the decline in Friday and Saturday card spending was smaller than on other days or lacked statistical significance.
Based on this, the researchers estimated that the cold snap in the first quarter and the summer (June–August) heat wave lowered the annual private consumption growth rate by about 0.18 percentage points this year. However, because there were fewer days of precipitation than a year earlier, there was an effect of raising the consumption growth rate by about 0.09 percentage points, so overall, this year's weather conditions reduced the private consumption growth rate by about 0.09 percentage points.
The researchers said, "Given the high likelihood that volatility in consumption patterns will expand and become routine due to abnormal weather and changes in working hours and work arrangements, it is important to closely analyze household consumption behavior using high-frequency indicators."