S. Korean households cut food spending to nine-year low amid persistent inflation

Korean dishes eaten off a table Getty Images Bank — A Korean household meal/ Getty Images Bank

SEOUL, September 1 (AJP) - South Korean households reduced their food spending to the lowest level in nearly a decade, as high prices forced families to cut back even on basic groceries.

Adjusted for inflation, monthly household spending on food and nonalcoholic beverages fell 1 percent in the second quarter from a year earlier, to 341,000 won, or about $245, according to government data released on Monday. That was the lowest level since 2016.

In nominal terms, spending rose 1.8 percent to 423,000 won. But the increase failed to keep pace with a 2.9 percent rise in food prices over the same period, reflecting a prolonged squeeze on family budgets.

Food costs have been rising faster than overall consumer prices for more than five years.

In the second quarter, the food price index reached 125.33, compared with 116.32 for the broader consumer price index, both based on 2020 levels.

The pressure has been compounded by extreme weather and currency swings that raised costs for food producers, who in turn have passed them on to consumers. Prices of instant noodles jumped 7.6 percent in July from a year earlier, while confectionery and ice cream rose 6 percent.

Families have also been reining in restaurant visits. Spending at eateries edged up just 0.2 percent in the second quarter, to 353,000 won per household.

Economists warn that conditions could worsen in the months ahead. With the government weighing increases in electricity and gas rates later this year, households already struggling with higher grocery bills may find little relief.

Kim Dong-young davekim0807@ajupress.com