Domestic political instability, economic recession, and the effects of high exchange rates and inflation have led to a contraction in consumer sentiment, resulting in a study predicting that this year's Lunar New Year will feature practical spending focused on cost-effectiveness. Three out of ten citizens stated they plan to reduce spending during the Lunar New Year compared to last year.

On Feb. 5, ahead of the Lunar New Year holiday, gift fruit sets are stacked high at Pohang Cheonghwa Co., Ltd. in Heunghae-eup, Buk-gu, Pohang. /Courtesy of News1

The Korea Chamber of Commerce and Industry conducted a 'Lunar New Year consumption perception survey' from Jan. 10 to 13 among 500 adults nationwide, revealing that 31.6% of respondents plan to reduce their expenditures compared to last year, according to a statement made on Jan. 22.

The response stating 'I plan to increase my expenditure' was only 22%. The most cited reason for reducing Lunar New Year consumption was 'continuing high inflation' (58.9%, multiple responses allowed). This was followed by 'sustained economic recession' (36.7%) and 'increased household debt' (31.0%).

The primary criterion for purchasing gifts for the Lunar New Year was 'cost-effectiveness' (68.2%, multiple responses allowed). This was followed by 'the recipient's preference' (33.1%), 'health-related' (31.1%), 'luxury' (22.0%), and 'design' (9.5%).

The most desired gifts were 'cash or gift certificates' (48.2%, multiple responses allowed). In contrast, the top choice for gifts to give was 'fruits or agricultural products' (48.5%, multiple responses allowed).

When it comes to gift purchasing budgets, '200,000 to 290,000 won' (24.9%) was the most common choice. This was followed by '100,000 to 200,000 won' (23.0%), '110,000 to 190,000 won' (19.7%), '300,000 to 390,000 won' (12.5%), and '400,000 to 490,000 won' (6.9%). The most common number of gifts to be given was 3 to 4, accounting for 45.9%.

Meanwhile, regarding the government's designation of temporary holidays, 56.8% of respondents stated that it was 'appropriate.' The most common reason for this approval was 'improvement in quality of life through rest' (62.7%).

Jang Geun-mu, director of KORCHAM's distribution and logistics promotion center, noted that 'support policies from the government are necessary for this Lunar New Year holiday to become a stepping stone for revitalizing domestic consumption in a situation where consumer sentiment is sluggish.'

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