S.Korean overseas card spending near pre-COVID-19 levels

South Korean residents’ overseas card use jumped in the first quarter to nearly recover levesl before the outbreak of COVID-19 on rising international travel with most restrictions against the pandemic lifted across the world.

Spending with cards including both credit and debit cards in other countries soared 50.3% to $4.6 billion in the January-March period from a year earlier, the largest since the fourth quarter of 2019, according to central bank data on Wednesday. Credit card use jumped 55.6% to $3.5 billion.

The average spending per card increased 19% to a five-year high of $307, the data showed.

The jump in overall overseas card spending added to concerns that Asia’s fourth-largest economy may lose momentum in terms of domestic demand, analysts said. Increasing consumption abroad does not result in a virtuous cycle including job creation. The country avoided a recession as the economy rebounded more than expected in the first quarter on strong private consumption.

“It is more important to increase domestic consumption for production-inducing effects,” said Kim Hyeon-Wook, an associate dean at the KDI School of Public Policy and Management.

GO ABROAD

South Koreans rushed to enjoy holidays abroad in the first quarter as most countries reopened their borders. The number of outbound travelers rose to about 5 million during the period, more than 12 times 405,659 a year earlier, according to the Korea Culture & Tourism Institute’s data.

Spending on cross-border shopping also grew with payments for purchases on overseas online shopping malls up 16.6% in the South Korean won currency on-year, according to statistics office data.

Card use of non-residents for consumption in the country more than doubled to $2 billion in the January-March period from a year earlier, the Bank of Korea data showed.

Compared to the previous three months, however, their card spending fell 4.1% as China has yet to allow group tours to its neighboring country, analysts said.

Write to Jin-gyu Kang at josep@hankyung.com
 
Jongwoo Cheon edited this article.