The share of "deficit households," whose expenditure exceeds disposable income, was the largest in six years. As of the fourth quarter of last year, one in four homes ran a deficit.
According to the Ministry of Data and Statistics (MODS) Korean Statistical Information Service (KOSIS) and the household trend survey on the 2nd, the deficit-household rate was 25% in the fourth quarter of last year. A deficit household is one whose consumption expenditure is greater than disposable income.
By fourth-quarter readings, the deficit-household rate was the highest in six years since 2019 (26.2%). It fell to 23.3% in 2020, recorded in the 24% range in 2021–2023, and came down to 23.9% in 2024. However, it rose 1.1 percentage points last year.
It appears that high inflation prolonged the period in which expenditure increased faster than income. Despite the recent stock market boom, deficit households may have lacked the capacity to invest and therefore missed out on gains from rising asset prices.
By income quintile, the lower the tier, the higher the deficit-household rate. In the fourth quarter of last year, the rate for the bottom 20%—the first quintile—was 58.7%, up 1.8 percentage points from a year earlier. It has risen for two straight years.
The second quintile was 22.4%, up 1.3 percentage points, and the third quintile was 20.1%, up 0.1 percentage point. The fourth quintile was 16.2%, up 2.9 percentage points. Only the fifth quintile—the top 20%—fell 0.9 percentage point to 7.3%.
Household interest burdens expanded to a record high. In the fourth quarter of last year, among non-consumption expenditure, average monthly interest costs per household were 134,000 won, up 13,000 won (11%) from a year earlier. The size of interest costs was the largest for a fourth quarter since quarterly statistics began in 2019.