South Korea's central bank Monday blamed rising household spending on education for hampering efforts to boost private consumption and economic growth. The Bank of Korea (BoK) called for government steps to divert household spending from education and medical services to other areas, listing them as major hurdles that slow much-needed domestic spending.
"Domestic consumption has focused on education and medical services whose spillover impacts on other industries are relatively weak," BoK director Kim Myung-Ki told reporters.
Household medical spending rose to 6.4 percent during the first half of this year from 3.9 percent in 2000, the bank said. Education accounted for 7.4 percent of total household spending during the first half of this year, compared with 5.4 percent in 2005 and 7.3 percent last year, it said.
France spent 0.8 percent of family income on education, compared with Britain's 1.4 percent and Japan's 2.2 percent, it said.
The first-half figure will rise to 8.2 percent if overseas bank remittances for children studying abroad are included, Kim said. "Our country is spending too much on education," he said, attributing the increase in education spending to nearly unlimited spending on private teaching.
Central bank figures showed household spending on education hit an all-time high of 39.8 trillion won (34 billion dollars) in 2008, up 7.7 percent from a year earlier. Spending on private education also rose to 20.9 trillion won last year from 20.04 trillion won a year earlier.
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