Exports have outpaced private spending for the first time in 47 years, the Bank of Korea reported on Thursday.
Exports of goods and services totaled W139.3 trillion in the first quarter to edge ahead of private spending, which amounted to W137.3 trillion (US$1=W1,089). This is the first time this has happened since Korea's outbound shipments surpassed the US$100-million in 1964.
The figures for exports and private spending refer to figures adjusted for inflation and currency fluctuations based on 2005 prices.
Compared to the first quarter of 1970, when the BOK first began to gather such data, exports have grown 222 times, while private spending has increased 11-fold, indicating that exports have grown at 10 times the speed.
The latest statistics show that the fruits of an export-driven economy have benefited only businesses, while failing to trickle down to private consumption. Last year, 13.8 percent of the national disposable income, which refers to the amount of money the public can spend or save, went into the pockets of businesses, setting a record high.
In contrast, individuals accounted for 63.2 percent of the national disposable income, marking an all-time low. The distribution ratio of income derived from labor stood at 59.2 percent last year, down 1.7 percentage points from 2009. This was the biggest drop since 1974, when the ratio fell 1.8 percentage points.
The government is now looking into ways to spur private consumption by making money flow into the pockets of self-employed workers, temporary employees and other social groups that are feeling the pinch of the recession.
"Sound exports are good news, but it looks like private consumption is growing weaker as uncertainties arise about domestic financial institutes due to mounting household debts and the financial crisis that has affected some savings and trusts [causing them to go bankrupt]," said Sung Tae-yoon, an economics professor at Yonsei University.
"It is important to stimulate domestic consumption, while boosting the stability of the financial system in order to soothe public jitters."