Income for young people in their 30s and under increased in the first quarter this year, but their propensity to consume weakened. Analysts attribute this to reduced consumer spending due to increased housing costs following high interest rates and inflation.
While expenditures on transportation, clothing, and groceries decreased, spending on entertainment and culture increased. This reflects the younger generation's spending trend of prioritizing cultural and recreational activities even at the cost of eating less or buying fewer clothes.
According to the Korean Statistical Information Service (KOSIS) on the 8th, the average monthly income for those under 39 in the first quarter was 5.48 million won, an increase of 8.0% from the previous year. However, the average propensity to consume for this group fell to 65.2%, a decrease of 6.3 percentage points from the same period the previous year.
The average propensity to consume indicates the proportion of consumption expenditure to disposable income. A higher rate means more income is being spent on consumption.
In terms of expenditure for those under 39 by category in the first quarter, essential spending items such as housing, water, and utilities (8.2%) and health (5.5%) increased compared to the same period last year. The increase was due to rising public utility charges.
Among other items, only entertainment and culture showed a double-digit growth rate of 13.8%.
Conversely, ▲transportation (-20.3%), ▲clothing and footwear (-11.5%), ▲food and non-alcoholic beverages (-3.3%), ▲alcoholic drinks and tobacco (-7.0%), and ▲household goods and housekeeping services (-8.2%) decreased. This shift is interpreted as a reduction in everyday outing expenses and clothing and footwear purchases in favor of increased spending on hobbies.
The tightening of finances by the 2030 generation is mainly attributed to increased burdens of rent and management costs due to high interest rates.
In the first quarter, actual housing expenses (rent and management fees) for those under 39 were 190,258 won, and interest expenses were 185,205 won, representing increases of 14.8% and 3.7%, respectively, compared to the same period last year.