Koreans Spend Record Sums Abroad
09 October, 2018
A strong won and cheap airfares have resulted in Koreans spending a record W32 trillion overseas last year, according to the Bank of Korea (US$1=W1,130). That is an increase of 9.3 percent from a year earlier.
The figure does not even include online shopping on overseas websites like Amazon and Alibaba or spending on business trips, meaning most of it occurred on holiday or during overseas study or training.
The amount is expected to increase further this year due to a weak Japanese yen and other factors encouraging Koreans to spend money overseas.
/Newsis
Overseas spending still accounted for only 4.2 percent of the total private consumption of W759.9 trillion, but the growth rate surpassed the increase in income and domestic consumption, thereby contributing to the economic slump.
According to the BOK, disposable income increased 14 percent and domestic private consumption 10.2 percent compared to three years ago, but overseas spending rose 39.4 percent.
The central bank in a recent report blamed the strengthening won and cheap flights. Last year, budget carriers accounted for 38 percent of total outbound tourism, and the exchange rate fell 11 percent from W1,208 to the U.S. dollar early last year to W1,071 by the end of 2017.
The Japanese yen also weakened from W1,036.8 to W949.1 per 100 yen over the same period. Those trends are continuing, raising expectations that Koreans will spend even more money overseas.
The number of Koreans traveling to Japan is skyrocketing due to the increasing affordability of products and services there. A total of 5.22 million Koreans visited Japan from January to August of this year, compared to 5.8 million Chinese.
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