Recently, Korea’s economic growth indicators appear favorable at first glance; however, since the pandemic, both price inflation and real income decline have progressed simultaneously, pushing the actual welfare of ordinary citizens to a lowest level.
Economists analyze that even with a high growth rate, accelerated consumer‑price inflation leads to a reduction in real income. Rising prices increase housing and financial costs, and the resulting financial burden severely strains people’s living expenses.
In particular, as 40 % price rise is reflected, real income shrinks sharply. Accordingly, average household income actually falls by about 34 %, causing an actual decline in national income. Researchers emphasize that inflation and real‑income dynamics interact mutually, requiring simultaneous adjustment of growth and living costs.
This phenomenon bears significant implications for government and central bank policy decisions. To curb inflation, monetary measures are needed together with strengthening income redistribution and housing support programs. At present, policies that lower price rise while boosting real income are being discussed.
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