Goldman Sachs: Limited Boost to Consumption from Asset Growth Among South Korean Residents

Reported by Jinse Finance, on July 20, Goldman Sachs analysts stated that the gains South Korean residents have obtained from the rise in the local stock market may provide only a limited boost to consumption. In a research report, they pointed out that the growth in residents' stock wealth this year might contribute approximately 0.3% of GDP to South Korea's consumption growth. However, as the Bank of Korea resumes its interest rate hike cycle, part of this modest growth may be offset by higher debt repayment costs. Additionally, they mentioned that the volatility of stock returns and the recent market correction might lead residents to perceive stock market gains as temporary, which would further limit the transmission effect of stock wealth growth on consumption. (Jin10)