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Key Points

The Bank of Korea just revealed how weather is really affecting our spending habits. Turns out those brutal heat waves caused a 7% drop in daily card spending when temperatures soared above 35 degrees. Even cold snaps made us spend 3% less on freezing days. The central bank's warning that these wild weather patterns are making our consumption behavior pretty unpredictable these days.

Key Points: BOK Says Extreme Weather Cuts South Korea Private Consumption Growth

  • Extreme heat waves reduced annual private consumption growth by 0.15 percentage points
  • Cold weather in first quarter cut consumption growth by 0.03 percentage points
  • Daily card spending fell 7% on days when temperatures exceeded 35 degrees Celsius
  • Below-average rainfall actually boosted consumption growth by 0.09 percentage points
2 min read

Unfavourable weather cuts private consumption growth this year: BOK

Bank of Korea report shows extreme heat waves and cold weather reduced private consumption growth, with daily card spending dropping up to 7% during severe conditions

"Unusual weather, changes in working hours and shifts in work patterns are likely to keep consumption patterns volatile - Bank of Korea"

Seoul, Sep 29

Extreme heat waves and other weather conditions this year have reduced the annual private consumption growth rate by about 0.09 percentage point, the central bank said on Monday.

A cold wave in the first quarter and a summer heat wave lowered annual private consumption growth by 0.03 and 0.15 percentage point, respectively, according to a report by the Bank of Korea (BOK), reports Yonhap news agency.

Conversely, below-average rainfall this year increased consumption growth by 0.09 percentage point, it showed.

The BOK also found that daily card spending fell by 7 percent on days of extreme heat, when the maximum temperature exceeded 35 C, compared with normal weather days, and decreased by 3 percent on cold-wave days, when the maximum temperature was at or below zero.

Daily card spending went down by 6 percent on days of heavy rainfall, when daily precipitation reached or exceeded 20 millimeters, the report showed.

The analysis was based on the data of card spending and weather conditions from the first quarter of 2023 through the second quarter of 2025 across 17 provinces.

"Unusual weather, changes in working hours and shifts in work patterns are likely to keep consumption patterns volatile," the BOK said in the report.

Meanwhile, South Korean stocks traded more than 1 percent higher late Monday morning on revived hopes for another rate cut by the Federal Reserve.

The benchmark Korea Composite Stock Price Index (KOSPI) had gained 40.09 points, or 1.18 percent, to 3,426.14 as of 11:20 a.m.

On Friday, U.S. stocks rebounded as U.S. consumer spending increased in August in line with the market expectations, sparking hopes for further monetary easing by the Fed.

In Seoul, major shares led the early gains.

Top-cap Samsung Electronics rose 1.68 percent, and chip giant SK hynix vaulted 3.05 percent.

Leading internet firm Naver jumped 7.99 percent, and major commercial bank Shinhan Financial Group advanced 2.17 percent.

K-pop powerhouse Hybe climbed 0.37 percent, and Samyang Foods, an instant noodle maker, added 0.61 percent.

—IANS

- IANS

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Reader Comments

R
Rohit P
Interesting analysis but I feel the methodology might be oversimplified. In India, weather impacts consumption differently across regions - coastal areas vs northern plains. Still, good to see central banks studying these patterns.
A
Ananya R
During Delhi's extreme summers, our family definitely spends less on outdoor activities and more on electricity bills! The consumption shift is real. Hope RBI does similar studies for India. 🔥
S
Sarah B
As someone working in economic research, this is fascinating data. The correlation between weather and consumer behavior is becoming increasingly important for policy making. Climate change will make this even more relevant globally.
V
Vikram M
Monsoon season in India actually boosts consumption in many sectors - umbrellas, raincoats, hot snacks, and indoor entertainment. The Korean study showing reduced spending during heavy rainfall is interesting but might not apply everywhere.
K
Karthik V
With climate change intensifying, such studies are crucial for economic planning. Indian policymakers should take note - our agriculture and retail sectors are heavily weather-dependent. Good to see central banks thinking ahead! 🌍

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