Goldman Sachs: The growth of Korean resident assets may have a limited boost to consumption

On 20 July, Goldman Sachs analysts stated that the benefits that Korean residents would derive from the rise in local stock markets could have a limited boost to consumption. In a study, they noted that this year ' s increase in the wealth of residential stock could increase Korean consumption by about 0.3 per cent of GDP. However, as the Central Bank of Korea restarts its interest-rate hike, some small increases may be offset by higher debt service costs. In addition, they mentioned that the volatility of stock returns and recent market reversals could lead residents to view stock market earnings as temporary, which would also limit the transmission effects of stock wealth growth on consumption. Kim Xian