According to a report released by the Bank of Korea (BOK) on Monday, South Korean households have saved an extra 100 trillion won (US$77.7 billion) since the start of the COVID-19 pandemic due to decreased consumption and increased government assistance.
The BOK’s report noted that the excess savings accumulated between 2020 and 2022 amounted to between 101 trillion won and 129 trillion won, which makes up 4.7 to 6 percent of the nation’s nominal gross domestic product and 9.7 to 12.4 percent of private spending during this period.
The increase in excess savings was attributed to the decrease in household spending amid the pandemic and an increase in household income last year due to good employment conditions and government aid.
According to the BOK, households are likely to keep the extra savings in the form of liquid financial assets, such as bank deposits and stocks.
BOK data shows that domestic households’ financial assets increased by over 1 quadrillion won between 2020 and 2022, almost double the 591 trillion won recorded between 2017 and 2019.