The coronavirus epidemic has forced especially middle-income families to tighten their belts.
The Korea Development Institute on Monday said private spending declined 2.8 percent last year, and by income bracket, households earning 40 to 60 percent of the median income cut spending the most or 6.8 percent.
The figures were 4.2 percent and 3.3 percent for households earning 20 to 40 percent of the median income and those earning 60 to 80 percent.
Top earners actually increased their spending by 2.8 percent, and the poorest were only able to reduce spending by 0.8 percent.
KDI said, Those in the bottom bracket were hit hardest by the epidemic, but their average income increased due to the government s support payments, enabling them to spend nearly as much as the year before. In contrast, middle-income households chose to decrease their spending and save more in preparation of the crisis to come.
Exports are forecast to lead South Korea s economic recovery from the COVID-19 pandemic.
According to the latest economic assessment by the Korea Development Institute on Thursday the country s economy is projected to grow 3.8 percent by the end of this year and grow 3-percent more in 2022.
The state-run think tank said exports of goods such as semiconductors, cars, and petroleum products all saw an increase in the first half of this year and the service sector is also showing signs of rebounding. It also forecast that consumer prices will go up 1.7 percent this year mainly due to the rise in global oil prices and higher prices of crops, livestock, and fish.