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1 in 4 households log deficit in fourth quarter of 2025 for 6-year high

Published: 02 Mar. 2026, 13:19 Updated: 02 Mar. 2026, 15:10

ATMs for major banks are seen in Seoul on Feb. 18. [YONHAP]

One in four Korean households spent more than their disposable income in the fourth quarter, pushing the share of deficit-running households to the highest level in six years, government data showed Monday.

The ratio came to 25 percent for the October-December period, the highest since the fourth quarter of 2019, when it stood at 26.2 percent, according to the data from the Ministry of Data and Statistics.

Market analysts said prolonged high inflation has again strained household finances, with spending rising faster than income.

They noted that deficit-running households may lack surplus funds for investment, potentially missing out on gains in asset values despite a recent rally in the stock market.

A government official cautioned, however, that the fourth quarter increase may have been influenced by temporary factors, including higher expenditure on durable goods and seasonal spending related to the Chuseok holiday in October.

The proportion of deficit-running households generally rises as income levels decline, reflecting a higher share of spending relative to income.

A customer waits at a bank in Seoul on Feb. 11. [NEWS1]

Among households in the lowest income quintile — the bottom 20 percent — 58.7 percent ran deficits in the fourth quarter, up 1.8 percentage points from a year earlier.

The ratio for the second income quintile rose 1.3 percentage points on year to 22.4 percent. The third quintile recorded a 0.1 percentage point increase to 20.1 percent, while the figure for the fourth quintile climbed 2.9 percentage points to 16.2 percent.

By contrast, the share among households in the highest income quintile — the top 20 percent — fell 0.9 percentage point to 7.3 percent.

Rising interest burdens also weighed on household spending capacity.

Average monthly interest expenses per household amounted to 134,000 won ($92) in the fourth quarter, up 11 percent from a year earlier.

Analysts warned that higher interest costs are likely to further pressure lower-income households and dampen their perception of economic conditions.

Yonhap