SEOUL, Nov 25 – South Korea’s credit card spending grew sharply in October, data showed Tuesday, pointing to a gradual recovery in domestic demand from the deep trough that followed April’s deadly ferry disaster.
Purchases made with credit cards reached 49.24 trillion won (US$44.21 billion) last month, growing 7.5 percent from a year earlier, according to the data compiled by the Credit Finance Association.
The data includes transactions on credit, debit and prepaid cards. Cash advances, overseas spending and card loans were not included.
The October gain marks an acceleration from the 6.3-percent on-year rise seen during the third quarter, which was the fastest growth since the first quarter of 2013, the data showed.
Most South Koreans use multiple credit cards, which has contributed to boosting private spending in the past few years, and their spending with plastic is often regarded as a measurement of private consumption.
South Korea’s economy expanded 0.9 percent in the third quarter from three months earlier, accelerating from the 0.5 percent on-quarter rise the previous quarter, as private consumption showed signs of recovery from a pullback following the mid-April ferry disaster, data from the central bank showed.
Private spending increased 1.1 percent on-quarter, turning around from a 0.3 percent decline in the second quarter, according to the Bank of Korea.
The government has undertaken a series of stimulus measures, including eased rules on mortgage loans, to shore up crippled domestic demand.
Last month, South Korea’s central bank pitched in by lowering its policy rate to a record low of 2 percent to give a much-needed boost to Asia’s fourth-largest economy. In August, the central bank cut the rate by a quarter percentage point as well.
Last year, credit card spending rose 4.7 percent on-year to reach 545 trillion won, the slowest pace since 2005 when the association began to compile related data and a sharp change from the previous year’s 13.5 percent expansion.
