Experts: Consumption Unlikely to See Significant Boost During Chuseok

Write : 2017-09-14 14:52:20 Update : 2017-09-14 15:23:45

Experts: Consumption Unlikely to See Significant Boost During Chuseok

Anchor: With the Chuseok thanksgiving holidays extended to a total of ten days, local retailers and leisure businesses are hoping to see more customers during the period. However, some analysts have cast doubt on whether consumption will see a significant boost.
Oh Soo-young tells us more. 
 
Report: With ten consecutive days of no work and all play, the Korean government and local businesses are hoping for a pickup in the pace of consumption recovery.
 
To encourage spending over the extended Chuseok thanksgiving holiday, the government plans to open up major cultural hot spots for free or at heavily discounted rates, as well as waive tollgate fees across expressways in the country.
 
Also, the country’s biggest sale event of the year “Korea Sale Festa” will kick off later this month.
 
However, economist Kim Doo-un says these measures may see limited impact, compared to the past.
 
[Soundbite: Kim Doo-un – economist, Hana Financial Investment(Korean)]
“Data certainly shows that public holidays boost private spending, but we need to consider the real price levels which have spiked as of late. Higher prices are burdensome for consumers so it’s hard to say that there’ll be a significant boost to the figures.”
 
Consumer prices in August spiked two-point-six percent-- the fastest pace in more than five years-- largely due to a sharp increase in food prices.
 
Another worrying factor is that even if consumers open their purses, they are likely to do so outside the country.
 
According to tourism industry insiders on Wednesday, including Cho Il-sang the public relations manager of Hanatour, more than one-point-one million Koreans are expected to holiday abroad this Chuseok-- double last year's 460-thousand. 
 
[Soundbite: Cho Il-sang – public relations manager , Hanatour (Korean)]
“Compared to the Chuseok holidays last year, we’ve seen the number of travelers double for this year. Many of them are going to Japan and Southeast Asia—and also faraway regions like Europe.”
 
Figures from the Bank of Korea show that the credit card usage of Korean residents overseas hit a record high in the second quarter of this year, amounting to some four-point-two billion dollars. Meanwhile, the recovery in domestic consumption remains sluggish.
 
[Soundbite: Hong Jun-pyo - senior researcher, Hyundai Research Institute(Korean)]
“We have seen a phenomenon where consumption has been stunted by household debt which has increased without growth in income."
 
Hong Jun-pyo , a senior researcher at the Hyundai Research Institute said that to achieve sustainable growth of the local economy, and reach the government's target rate of three percent for this year, structural problems such as job and income instability, youth unemployment and the soaring level of household debt needs to be tackled.
Oh Soo-young, KBS World Radio News.

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