Engel coefficient for low-income earners hits 8-yr high in 2012

The proportion of spending on food items by low-income earners in South Korea rose to the highest level in eight years in 2012, data showed Tuesday, suggesting that price hikes toughened the livelihoods of the economically weak people.

According to the data by Statistics Korea, the so-called Engel's coefficient for households in the lowest 20 percent income bracket rose to 20.79 percent last year from 20.7 percent tallied a year earlier, marking the highest figure since 2004 when it was 20.8.

The coefficient is the proportion of food spending to households' total consumption expenditures, which does not count spending on taxes, pensions and insurance.

Last year, monthly consumption expenditures by households in the cited income bracket increased 2.9 percent on-year to 1.25 million won ($1,150). But the pace of growth in their spending on food and non-alcoholic beverages was faster, rising 3.4 percent to 260,771 won, the data showed.

The rise in Engel's coefficient for poor citizens came despite the relatively stabilized inflation. It was attributable mostly to food price hikes, which grew faster than other items.

The country's consumer prices gained 2.2 percent in 2012, the second slowest pace since the statistics agency unveiled related figures in 1965. Prices of food and non-alcoholic beverages jumped 4 percent.

The coefficient for households in the top 20 percent income bracket, meanwhile, declined from 11.83 to 11.59 percent over the same period, according to the data. (Yonhap News)