South Korea's private spending fell to record low levels last year, according to the central bank Tuesday.
Data from the Bank of Korea showed the ratio of private spending to the country's gross domestic product came to 48.1 percent, the lowest since record keeping began in 1970.
The ratio used to run in the 70 percentile in the 1970s, but it slid to 53.8 percent in 2000 and further to 49.3 percent in 2015, the data showed. It further dipped to 48.7 percent in 2016.
Comparisons with other countries indicate that South Korea's figures are lower. In 2015, the corresponding number was 68.1 percent for the United States, 64.9 percent for Britain, 56.6 percent for Japan and 53.9 percent for Germany.
Economists say that while past contractions in private spending were caused by the nation's economic expansion through high investment and trade, recent falls have to do with a stunted job market and an aging society. People worried about unstable jobs and the future are holding back on spending, they argue.
Statistics Korea put last year's unemployment rate for young adults, aged between 15-29, at a record high 9.9 percent. A separate index that measures the number of people who want to work but cannot because of a mismatch in labor supply and demand, which better reflects the on-ground jobless rate, measured 22.7 percent for the group.
Real household income showed minus growth from the fourth quarter of 2015 to the third quarter last year before rising 1.6 percent in the final quarter.
At the same time, the society was aging, with the proportion of people in their 30s to 50s, the main group of spenders, falling behind that of the older generation.
"The fall in private spending basically means that jobs and income are not supporting (the spending)," said Kim Kwang-seok, a professor at Hanyang University in Seoul. "The government is initiating an income-led growth, but the results do not appear to be showing yet." (Yonhap)
