Seoul: Excess funds held by South Korean households soared to an unprecedented level in the first quarter, driven by a downturn in housing purchases and various forms of consumption, as revealed by central bank data on Tuesday. Net financial funds, which represent the difference between financial assets and liabilities, surged to a record 92.9 trillion won (US$69.31 billion) by the end of March. This marks a significant increase from the 62.6 trillion won recorded just three months prior.
According to Yonhap News Agency, these excess funds represent the money that remains on household balance sheets after managing available resources through deposits, stock investments, and other financial activities. The Bank of Korea (BOK) attributed the rise in excess funds to increased income levels, partially boosted by year-end bonuses, alongside a decrease in new apartment supply and a slowdown in consumption.
BOK official Kim Yong-hyun highlighted at a press briefing that these factors contributed to the record high in excess funds. Meanwhile, non-financial corporations saw an increase in net funds, raising 18.7 trillion won during the first quarter. This figure marks a rise of 2.5 trillion won compared to the previous quarter.
The data indicates that the demand for operating funds grew, partly due to bonus payments, even as investments slowed amid worsening economic conditions and mounting uncertainties.