Thanks to a booming semiconductor market, major companies are projected to pay bonuses of 60 trillion to 70 trillion won next year, six times the amount distributed this year. This large-scale bonus payout, combined with increased government household support and improved purchasing power from currency depreciation, is expected to enhance the recovery of private consumption next year. However, since bonuses are concentrated among high-income earners, it may take time for the benefits to spread across households.
According to a report titled 'Assessment of Conditions for Future Recovery of Private Consumption' released by the Bank of Korea on October 22, the estimated bonus payouts in key sectors such as semiconductors, automobiles, and shipbuilding will reach approximately 60 trillion to 70 trillion won. This figure is about six times this year's bonus payout of 10.9 trillion won. Notably, Samsung Electronics and SK Hynix are expected to distribute bonuses totaling 60 trillion won in the first quarter of next year.
The Bank of Korea analyzed that the large bonus payouts could increase the growth rate of private consumption by 0.1 to 0.15 percentage points. It is estimated that for every 1 million won increase in temporary income, consumption would rise by about 110,000 won. Since the bonus payments are concentrated at the beginning of the year, the consumption boost is expected to materialize in the first half of the year.
However, given the unprecedented scale of the bonuses, there is uncertainty regarding their actual impact on consumption. Kwak Beop-jun, head of the Bank of Korea's Economic Trends Team, stated, "The scale of this bonus is quite unusual, making it difficult to estimate consumption based on past data." He added, "Some of it will likely be spent, while the rest may be saved, but it is unclear whether those savings will go into financial assets or real estate. Such savings could enhance future consumption capacity, leading to delayed spending."
Increased dividends from semiconductor companies are also expected to contribute to the recovery of consumption. Samsung Electronics is projected to issue a special dividend of about 30 trillion won in November, followed by an additional 40 trillion to 60 trillion won in dividends after the first quarter of next year. SK Hynix's dividend for next year is estimated to be between 10 trillion and 30 trillion won. The Bank of Korea estimates that approximately 11 trillion won of these dividends will be allocated to households, which could raise the growth rate of private consumption by about 0.05 percentage points.
The government's expansion of household transfer payments is also expected to support consumption recovery. With an increase in corporate tax payments from semiconductor companies, the government's financial capacity is expected to grow, leading to an estimated 20 trillion won increase in household transfer payments next year compared to this year. The Bank of Korea anticipates that this will enhance the growth rate of private consumption by 0.2 to 0.25 percentage points.
Additionally, the improvement in real purchasing power due to currency depreciation is a positive factor. If the won-dollar exchange rate falls by 10%, it is estimated that household real purchasing power would improve by about 0.35% through lower import prices. This effect is particularly pronounced among low-income households, where the proportion of consumption expenditure relative to income is higher.
Kwak noted that while the decline in the exchange rate negatively impacts the profitability of export companies, "recently, the effects of exchange rate fluctuations on corporate exports and growth rates have diminished significantly, suggesting that the positive benefits for households are relatively larger."
However, high household debt, sluggish construction activity, and potential stock market corrections are cited as constraints on consumption recovery. The ratio of household debt to disposable income for indebted households rose to 196.1% in 2025, up from 189.0% the previous year. The recent stock market corrections could also limit consumption recovery due to the negative wealth effect.
The Bank of Korea stated, "While the recovery of private consumption is still limited in terms of categories and income groups, it is expected to gradually expand as the positive effects of the semiconductor market's boom spread into next year."
* This article has been translated by AI.
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