S. Korea to reflect subscriptions, smartwatch costs in consumer price data
Seoul, July 7
South Korea will revise items included in the consumer price index basket in a regular reshuffle, reflecting the latest trends by adding subscriptions and smartwatch-related costs, with details set to be announced in December, the statistics agency said on Tuesday.
The Ministry of Data and Statistics said it will carry out the restructuring of items included in the consumer price survey, with the latest round of adjustments focusing on reflecting consumers' spending patterns in the digital sector, reports Yonhap news agency.
In detail, the country will add subscription fees for software and cloud services, while excluding items that have become less popular recently, including bracken fern, an ingredient used in Korean side dishes.
Other categories to be added include meal kits, electric vehicle charging fees, online shopping subscriptions and malatang, a Chinese dish that has gained popularity in South Korea in recent years.
South Korea plans to gather public opinions through mid-July before finalizing the reshuffle.
Meanwhile, excess funds held by South Korean businesses hit an all-time high in the first quarter as strong semiconductor exports boosted corporate earnings, central bank data showed on Tuesday.
Net financial funds -- the value of financial assets minus financial liabilities -- held by non-financial corporations totalled 20.8 trillion won (US$13.6 billion) at the end of March, up from 100 billion won three months earlier, according to data from the Bank of Korea (BOK).
It marked the highest quarterly figure since the BOK began compiling the data in 2009.
"Companies are mainly debtors as they usually borrow more money for investment and other business purposes than they earn," a BOK official said. "In the first quarter, however, their net profits surged due to semiconductor exports, resulting in excess funds."
Households' net financial funds rose to 79.2 trillion won in the first quarter from 67 trillion won three months earlier, partly due to year-end bonuses and a decrease in the supply of new apartments.
Financial assets held by the country's household and non-profit organisations totalled 6,417.1 trillion won at the end of March, up 209.4 trillion won from three months earlier.
Their debts rose by 26 trillion won from three months earlier to 2,466.8 trillion won. The ratio of financial assets to liabilities owned by households stood at 2.6.
— IANS
Reader Comments
Koreans are always ahead with tech trends! But is anyone else surprised they're removing bracken fern? That's a staple in Korean cuisine. 😅 Reminds me how our CPI still includes things like 'gur' and 'khandsari' that many urban Indians don't buy regularly. Good to see them adapting, but I wonder how accurate their CPI will be with such quick changes.
As an economist, this makes sense. Subscription models are booming globally – even in India we have OTT platforms, cloud storage, and meal kit services now. But the huge jump in Korean corporate cash reserves (20.8 trillion won!) shows how semiconductor exports are boosting their economy. For India, we need similar high-value manufacturing push. Korea's model is worth studying.
Korea updating its CPI basket is a good practice – many countries do this every few years. Adding EV charging fees and malatang shows they're tracking real consumption. The household debt figure (2,466.8 trillion won) is concerning though. In the US, we also see high household debt but with rising asset values. India's situation is different – our household debt-to-GDP is lower but rising fast. Interesting parallels.
Nice to see they're including meal kits and online shopping subscriptions. The pandemic changed how we spend money everywhere. In India too, we're ordering more from Zomato and Swiggy, using Amazon Prime, and buying meal kits from Licious. But will this new CPI actually reflect what common people like us spend on? Sometimes these official numbers don't match ground reality. 🤷♀️
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