SEOUL, KOREA - October 28 marks the annual Savings Day in Korea,although the nation’s household saving rate fell to the lowest level in theworld a long time ago.There are concerns that if the level of household savingsis too low, the economy wouldn’t be able to grow as fast as hoped for.
According to the Bank of Korea on October 28, thenation’s net household saving rate stood at 4.5 percent last year, up from 3.4percent a year ago.
The nation’s household saving rate, however, has been ona downward trend since 2001. It was above the 5 percent level only twice sincethen (8.4% in 2004 and 6.5% in 2005).
After peaking at 24.7 percent in 1988 when the SeoulOlympics was held, the household saving rate averaged at 16.1 percent during the1990s and thereafter showed a downward movement.Since 2001 when it stood at 4.8percent, the rate has remained below the OECD average.
As of 2011, Korea’s household saving rate stood at 3.4percent, falling behind the OECD average of 5.3 percent. This figure is muchlower than that of major European countries, including Germany, France, andSwitzerland which range between 9 and 13 percent, but also than that of the U.S.(4.2%) which is famous for being a nation of profligate consumers withoutsavings.
Article provided by The Korea Economic Daily
