Largely influenced by a surge in overseas travel, household overseas expenditures hit a record high in the third quarter, the Bank of Korea said yesterday.
The percentage of overseas spending out of the total expenditures also hit a new high, reaching nearly 5 percent.
The central bank said that Korean households spent 4.7 trillion won ($5.1 billion) overseas in the third quarter, surpassing the previous record of 4.6 trillion won in the first quarter this year.
The increase mostly stemmed from a surge in overseas travel, which hit a record high in August, the BOK said.
In August, the nation’s travel-account deficit hit an all-time low due to the increasing number of Koreans who spend their summer vacations out of the country.
“Korean households mostly spend their money in overseas countries on travel, study and medical expenses,” a BOK official said.
The proportion of overseas spending among the total expenditures went up to 4.97 percent in the third quarter, which also broke the previous record of 4.94 percent in the first quarter this year.
David Kim, an analyst at Woori Investment & Securities, said that the expansion of overseas spending is unlikely to hurt domestic spending.
“The continued increase in households’ overseas spending is seen as a long-term trend now which will boost the overall spending sentiment,” he said.
Kim added that the stronger Canadian and Australian currencies also played a significant role in the increased spending on overseas studies.
Meanwhile, expatriates’ spending in Korea plunged to an all-time low of 842.3 billion won in the third quarter, down 7.7 percent from a year ago, the BOK said.
By Kim Yoon-mi