Financial surplus among South Korean households increased in the first quarter amid the lackluster private consumption, central bank data showed Monday.
Fund surplus, which means fund management minus borrowing, held by households and non-profit organizations grew to 25.3 trillion won (24.8 billion U.S. dollars) in the first quarter from 15.6 trillion won in the prior quarter, according to the Bank of Korea (BOK).
Borrowing from financial institutions tumbled to 3.3 trillion won in the first quarter from 25.2 trillion won in the previous quarter as households became reluctant to spend money amid worries about the economic recovery.
Households lifted bank deposits from 13.6 trillion won to 17.7 trillion won over the cited period, while increasing stock investment from a reduction of 5.1 trillion won to a rise of 4.2 trillion won.
The financial surplus was expected to grow further in the second quarter as consumers refrained from spending on entertainment and travel following the ferry sinking disaster.
The ferry Sewol capsized and sank off the southwestern coast on April 16, leaving more than 300 people, mostly high school students, dead or missing. Still, 12 people remained unaccounted for.
Lack of funds among non-financial companies reduced to 6.4 trillion won in the first quarter from 8.9 trillion won in the previous quarter due to sluggish facility investment.
Borrowing from financial institutions surged to an increase of 27 trillion won in the first quarter from a reduction of 4.8 trillion won in the prior quarter, but it was mainly attributable to the faltering direct-financing market such as the corporate bond market.