21.4 trillion won in household borrowing from financial institutions, 31.4 trillion won in one year↓
49.5 trillion won in borrowings from corporate financial institutions… Increased demand for working capital due to rising raw material prices
As the stock market continued to weaken this year, the share of stocks in household financial assets also decreased.
Instead, savings-type deposits, which are safe assets, increased noticeably.
According to the money circulation (provisional) statistics released by the Bank of Korea on the 6th, the net operating amount of households (including individual business owners) and non-profit organizations in the first quarter of this year was 60.4 trillion won.
Compared to the first quarter of last year (51.1 trillion won), it increased by 9.3 trillion won in one year.
The net fund management amount is the value obtained by subtracting the funding amount from the fund management amount of the relevant economic agent. Generally, households generally use the net fund management by depositing or investing spare money while the net fund management amount is positive. It serves to supply to other economic entities such as companies or the government that are in a negative (-) state (net procurement).
The BOK explained that the increase in household net fund management in the first quarter was due to an increase in household income due to COVID-19 support, etc. and a slowdown in housing investment.
This means that households spend less money on anything other than their financial assets.
In fact, according to the National Statistical Office household trend survey, the monthly average disposable income increased from 3,511,000 won in the first quarter of 2021 to 3.86 million won in the first quarter of this year, while the housing transaction volume decreased from 280,000 to 138,000 during the same period.
In the first quarter, excluding the amount of funding, households’ total fund management (83.2 trillion won) decreased by 20 trillion won from a year ago (104 trillion won).
Breaking down fund management by sector, households’ domestic equity securities and investment funds (9.5 trillion won) increased from the previous quarter (-1.2 trillion won), but compared to the first quarter of last year (42.3 trillion won), one year bird greatly decreased.
Excluding investment funds, households invested 16 trillion won in domestic and foreign stocks in the first quarter.
It acquired 7.7 trillion won worth of shares issued and invested by residents (domestic stocks) and 8.3 trillion won worth of overseas stocks.
The amount of domestic and foreign stock acquisitions was higher than in the previous quarter (1 trillion won), but fell sharply to about a third compared to the first quarter of last year (52.2 trillion won).
In contrast, household savings deposits and money trusts increased by 42.3 trillion won and 6.4 trillion won, respectively, in the first quarter, and the rate of increase was the same in the previous quarter (30.6 trillion won and 4.8 trillion won) and in the first quarter of last year (15 trillion won and 1 trillion won). 3 billion) was greater.
As a result, the proportion of stocks and investment funds in household financial assets, which reached an all-time high of 21.6% in the second quarter of last year, fell to 20.1% in the first quarter of this year.
On the other hand, the proportion of deposits (41.8%) increased from a year ago (41.0%) or the previous quarter (41.0%).
As of the end of last year, Korea’s share of stocks in household financial assets (20.8%) compared to other countries was lower than the US (40.3%) and France (24.1%), but Germany (12.6%), the UK (11.7%), Japan (10.8%) is higher than that.
“In the first quarter, funds moved from stocks to safe-haven savings-type deposits, and the trend of rebalancing (rebalancing the proportion of assets under management) continued in the first quarter,” said Bang, China-Kwon, head of the money circulation team at the Economic Statistics Bureau of the BOK.
In addition, households raised a total of 22.7 trillion won in the first quarter, which is down from the previous quarter (34.5 trillion won) or a year ago (53 trillion won).
Of the amount raised, 21.4 trillion won was borrowed from financial institutions.
Also, the amount of borrowing decreased sharply compared to the previous quarter (33.1 trillion won) and a year ago (52.8 trillion won).
In the case of non-financial corporations, the amount of net procurement in the first quarter was 27.8 trillion won, up from 18 trillion won a year ago.
This is because borrowing from financial institutions (49.5 trillion won) and stock issuance (21 trillion won) increased compared to the first quarter of last year (22.6 trillion won and 19.5 trillion won) as demand for working capital increased due to rising raw material prices.
The general government’s net procurement in the first quarter was 23.3 trillion won, a sharp increase from a year ago (8.3 trillion won).
Team leader Bang analyzed, “The government’s net procurement scale has grown as government consumption has increased due to active fiscal execution, such as an additional supplementary budget in response to COVID-19.”