The lower the income, the greater the burden of living expenses due to rising prices. The inflation rate of groceries, which comprises a high proportion of expenditure for the low-income group, reached twice the overall inflation rate.
On 2nd, the Federation of Korean Industries (FKI) analyzed the 'consumer price index for the past decade (2014–2024) by income bracket' and found that the inflation rate felt by the lowest income group (1st bracket) was 23.2%, which is 2.6 percentage points higher than that of the high-income group (5th bracket) at 20.6%.
The perceived inflation rate reflects actual consumption patterns of consumers every year. While the general consumer price index compiled by the Statistics Korea uses a fixed expenditure proportion from the 'base year (2020)' as a benchmark, the perceived inflation is calculated based on the expenditure proportion for the 'current year,' allowing it to immediately reflect changes in consumption patterns due to economic fluctuations.
Over the past decade, the breakdown by income bracket shows: ▲ 1st bracket 23.2% ▲ 2nd bracket 22.4% ▲ 3rd bracket 21.7% ▲ 4th bracket 20.9% ▲ 5th bracket 20.6%, indicating a tendency for lower income earners to feel a greater burden from inflation.
The main factors increasing the burden on the low-income group were the rising costs of groceries and heating expenses related to housing. Typically, low-income earners have a disproportionately large share of food and housing expenses relative to their disposable income.
In the past decade, the expenditure shares of the low-income group were concentrated in areas directly related to survival: ▲ groceries and non-alcoholic beverages (20.9%) ▲ dwellings, water, and heating (20.0%) ▲ health (12.6%). During this period, grocery prices rose by 41.9%, nearly twice the overall inflation rate of 21.2%.
The high-income group (5th bracket) had high expenditure shares in ▲ transportation (13.0%) ▲ education (10.5%) ▲ recreation and culture (9.0%). In the past decade, the inflation rates for these items were significantly lower than the overall inflation rate at 5.3%, 10.6%, and 9.2%, respectively.
Lee Sang-ho, head of the economic and industrial department at FKI, noted, 'Over the past decade, food prices have risen significantly, increasing the burden of perceived inflation on vulnerable groups,' and emphasized the need to stabilize agricultural product supply, improve distribution regulations, and diversify agricultural imports to protect these vulnerable groups.