The Bank of Korea (BOK) said real gross national income (GNI) rose 15.6 percent from a year earlier and 3.1 percent from the previous quarter. Real personal gross disposable income increased 5.5 percent from a year earlier and 2.1 percent from the previous quarter.
The annual increase in Real GNI was the strongest since the fourth quarter of 1988, when it rose 15.7 percent. The rise was largely due to better trade conditions.
Real trading gains increased to 58.5 trillion won, up from 38.7 trillion won in the first quarter. However, real net income from other countries fell to 7.9 trillion won from 11.6 trillion won.
Real GNI growth was still much higher than real GDP growth, which increased by 0.6 percent from the previous quarter.
Real personal disposable income rose 5.5 percent from last year. Its 2.1 percent quarterly increase was also smaller than the 3.1 percent rise in real GNI.
The income breakdown also showed sharply different rates of increase.
Gross operating surplus jumped 18.5 percent from the previous quarter, the strongest increase since the series was first published in the second quarter of 2010. Compensation of employees rose 1.9 percent.
Nominal GNI increased 8.8 percent from the previous quarter and 26.4 percent from a year earlier to 846.9 trillion won ($629.2 billion). Nominal GDP rose 9.2 percent to 834.9 trillion won and was also 26.4 percent higher than a year earlier.
The gap between nominal and real growth coincided with a sharp increase in the GDP deflator.
The GDP deflator climbed 21.9 percent from a year earlier. The domestic-demand deflator excluding inventories rose 3.6 percent.
The export deflator surged 56.6 percent, while the import deflator rose 21.0 percent. The average won-dollar exchange rate was 7.0 percent higher than a year earlier during the quarter.
Real GDP expanded 0.6 percent from the previous quarter and 3.7 percent from a year earlier, unchanged from the advance estimate released in July.
Manufacturing grew 1.4 percent, led by computer, electronic and optical products. Services expanded 1.0 percent on gains in wholesale and retail trade and accommodation and food services. Finance and insurance as well as information and communication also increased.
Construction contracted 1.9 percent as civil engineering activity declined.
On the expenditure side, private consumption rose 0.4 percent and government consumption increased 0.1 percent.
Construction investment slipped 0.1 percent. Facilities investment rose 0.2 percent, while intellectual property products investment increased 3.4 percent.
Exports increased 1.3 percent, led by semiconductors and machinery and equipment. Imports gained 0.7 percent.
The gross saving ratio rose 3.9 percentage points to 45.6 percent, the highest since the series began in 1970.
Gross national disposable income increased 8.9 percent from the previous quarter. Final consumption expenditure rose 1.6 percent, helping widen the gap between income and spending.
The household net saving ratio increased to 9.7 percent from 8.8 percent.
The gross domestic investment ratio fell to 24.2 percent from 25.3 percent. Nominal gross capital formation itself increased 4.3 percent during the quarter, however, meaning the lower ratio did not reflect an outright decline in investment.
AJP Takeaways
- South Korea's real GNI rose 15.6 percent from a year earlier, the fastest increase since the fourth quarter of 1988.
- South Korea's real personal gross disposable income increased 5.5 percent from a year earlier, below the 15.6 percent increase in real GNI.
- South Korea's gross saving ratio reached 45.6 percent, the highest since the series began in 1970, while the gross domestic investment ratio fell to 24.2 percent.
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