Low-income households hit harder by food inflation, with worse to come in Aug.-Sept.

Food spending by low-income households — covering both groceries and dining out — rose more than 3 percent in the second quarter of this year compared with the same period a year earlier, outpacing increases seen among middle- and high-income groups.

Experts warned that seasonal factors such as heat waves and heavy rains in August and September, combined with the approach of the Chuseok holiday, could make food price pressures even more severe, particularly for low-income households.

Data from the Korean Statistical Information Service (KOSIS) showed that all households spent an average of 891,000 won ($646) per month on food in the second quarter, up 3.3 percent from a year earlier.

Of that total, spending on groceries and non-alcoholic beverages averaged 434,000 won per month, while dining out and other meal expenses accounted for 457,000 won.

Broken down by income bracket, the second quintile — households in the bottom 20 to 40 percent of earners — recorded the steepest increase, with monthly food spending rising 6.9 percent year-on-year to an average of 657,000 won.

Within that group, monthly spending on groceries and non-alcoholic beverages averaged 344,000 won, while meal expenses came to 312,000 won.

The second quintile's food spending growth was more than double the overall average. The first quintile — the lowest earners — posted the second-highest increase at 6.1 percent, with average monthly food spending of 473,000 won.

Within the first quintile, grocery and non-alcoholic beverage spending averaged 289,000 won per month, while meal expenses averaged 184,000 won. The fourth quintile, which spent an average of 1.11 million won per month on food, posted the third-highest increase at 3.1 percent — roughly half the rate of the first quintile.

The third quintile, at 841,000 won per month, saw food spending rise 2.0 percent, while the fifth quintile — the highest earners, at 1.38 million won — recorded the smallest increase at 1.8 percent.

Food spending as a share of total household expenditure was highest among the first quintile at 30.3 percent, up 0.2 percentage points from a year earlier.

The second quintile followed at 27.2 percent, up 1.0 percentage point. The fifth quintile had the lowest share at 17.8 percent, which shrank by 0.4 percentage points from a year ago.

The heavier food burden on low-income households appears to stem from the fact that, even as food prices climbed, these households could not significantly cut back on consumption because the items involved are necessities.

In the second quarter, prices rose sharply for staple ingredients and condiments commonly found on Korean dinner tables, including rice (up 13.2 percent), potatoes (11.1 percent), green onions (10.0 percent), soy sauce (9.3 percent) and eggs (9.0 percent).

Rice in particular has posted double-digit price increases for four consecutive quarters. Eggs — an affordable and convenient source of protein — also saw steep price gains throughout the year after an avian influenza outbreak last winter disrupted supply.

Prices for budget-friendly dining options also rose faster than the overall second-quarter consumer price inflation rate of 3.0 percent, adding to the burden on low-income households. Triangle kimbap and tteokbokki each rose 4.0 percent, while jajangmyeon gained 3.9 percent and haejangguk 3.8 percent.

Kim Gwang-seok, head of economic research at the Korea Economic and Industrial Research Institute, said food prices could spike sharply in August and September as seasonal factors — heat waves and heavy rains — reduce supply while demand rises ahead of the Chuseok holiday. "Food price pressures could become even more severe, particularly for low-income households," he said.

He added that a further concern was the risk of low-income households turning to debt to cope, which could compound their burden if interest rates rise at the same time. "Both the inflation burden and the debt burden on low-income households could grow considerably," he said.

Kim Jeong-hwan, an associate research fellow at the Korea Institute of Public Finance and Taxation, also highlighted the vulnerability of low-income single-person households to high inflation in a recent report titled "Applications of Revealed Preference Estimation: Analyzing Changes in Household Welfare from Price Fluctuations." The report attributed this vulnerability to low-income households concentrating their spending on necessities such as food and housing.

In the report, Kim advised that policymakers consider reflecting the actual inflation experienced by low-income households — rather than the overall consumer price index — when calculating welfare benefits linked to consumer price growth, such as the basic pension and national basic livelihood security payments.