One in four South Korean households spent more than their disposable income in the fourth quarter of 2025, pushing the share of deficit-running households to the highest level in six years, government data showed. The ratio reached 25 percent for the October-December period, the highest since the fourth quarter of 2019. Market analysts attributed this to prolonged high inflation straining household finances.
Government data from the Ministry of Data and Statistics showed that 25 percent of South Korean households ran deficits in the fourth quarter of 2025, the highest ratio since the fourth quarter of 2019 when it was 26.2 percent. A deficit household is defined as one whose consumption spending exceeds its disposable income.
Market analysts stated that prolonged high inflation has strained household finances once again, 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 amid a recent rally in the stock market.
A government official cautioned that the increase in the fourth quarter may have been influenced by temporary factors, including higher expenditure on durable goods and seasonal spending related to the Chuseok holiday, which fell in October.
The proportion of deficit-running households generally rises as income levels decline. Among households in the lowest income quintile—the bottom 20 percent—58.7 percent ran deficits, up 1.8 percentage points from a year earlier. The second quintile rose 1.3 percentage points on-year to 22.4 percent, the third to 20.1 percent with a 0.1 percentage-point increase, and the fourth to 16.2 percent, up 2.9 percentage points. In contrast, the share among 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.
