SEOUL Nov 16 South Korean households'
disposable income grew by the fastest annual pace in more than
eight years last quarter but their consumption fell,
highlighting the fragility of consumer confidence amid uncertain
The average South Korean household saw disposable income
rise by a real 4.6 percent in the July-September period over a
year earlier, Statistics Korea data showed on Friday, marking
the fastest growth on record since the first quarter of 2004.
The annual growth in disposable income - total income less
spending on non-consumption purposes, such as tax - accelerated
for a sixth consecutive quarter since posting a decline of 0.9
percent in the first quarter of 2011.
Despite the increased disposable income, South Korean
households cut spending for consumption by a real 0.7 percent in
the September quarter over a year earlier.
The robust income growth in real terms occurred as annual
consumer price inflation eased to a more than 12-year low of 1.6
percent in the third quarter from 2.4 percent in the second
quarter, while employment posted solid growth.
Despite this benign outlook, a key consumer sentiment index
from the central bank's monthly surveys stood below 100
demarcating optimism from pessimism for a third consecutive
month in October, compared with an average of 100.75 for the
preceding one-year period.
South Korea's economy is especially vulnerable to global
trade and capital flows not simply because of its heavy reliance
on exporting companies but because of the openness of its
financial markets to global investors.
Both the central bank and the government have said Asia's
fourth-largest economy should start to recover from the current
quarter after posting growth of just 1.6 percent in the
July-September period year-on-year.
(Reporting By Se Young Lee; Editing by Choonsik Yoo and Eric