[Weekly Review] Electricity Rates to Rise Next Month... Up to 1,050 KRW Increase per Month for 4-Person Households

3.0 KRW per kWh ↑... KEPCO Raises Rates for the First Time in 8 Years
Youth Debt at 27% of Total
Significantly Outpaces Other Age Groups' Growth Rate

[Asia Economy Reporter Jang Sehee] The government and Korea Electric Power Corporation (KEPCO) have decided to raise the electricity rates for the fourth quarter, effective from October 1. Accordingly, for a household of four using an average of 350 kWh per month, the electricity bill will increase by up to 1,050 KRW per month in the fourth quarter. Exports have increased by more than 20% compared to the same period last year as of the 20th of this month. If this trend continues, the upward trend that began in November last year is likely to continue for 11 consecutive months.

◆ Sudden Increase in Electricity Rates for Q4 This Year = The government and KEPCO have abruptly raised the electricity rates for the fourth quarter (October to December), effective October 1. On the 23rd, the government and KEPCO announced that the final fuel cost adjustment rate for Q4 was set at 0.0 KRW per kWh. This is the first increase in electricity rates in about eight years since November 2013. It is a 3 KRW increase compared to the previous quarter (-3 KRW), returning to the same level as last year. Since this year, the government introduced a fuel cost linkage system that reflects the fuel costs involved in electricity production in the electricity rates every three months. In the first quarter, the rate was lowered by 3.0 KRW per kWh. In the second and third quarters, considering inflation and the impact on the national economy, the rates were frozen at the same level as the first quarter. The government’s sudden increase in Q4 electricity rates is due to the sharp rise in fuel costs for electricity production, including liquefied natural gas (LNG), bituminous coal, and oil.

◆ Exports Up 22.9% from September 1 to 20 = According to the Korea Customs Service on the 23rd, exports from September 1 to 20 amounted to 36.1 billion USD, an increase of 22.9% (6.71 billion USD) compared to the same period last year. Reflecting this, the cumulative annual export amount reached 447.9 billion USD, up 27.2% (95.8 billion USD) from the same period last year. The number of working days this month is 14.5, one day less than the same period last year (15.5 days). Considering this, the average daily export amount was 2.49 billion USD, a 31.3% increase compared to 1.89 billion USD in the same period last year. Imports from September 1 to 20 amounted to 35.0 billion USD, up 38.8% (9.77 billion USD). The cumulative annual import amount also rose to 425.5 billion USD, an increase of 29.0% (95.77 billion USD). Compared to the same period last year, increases were seen in crude oil (85.3%), semiconductors (15.8%), petroleum products (241.8%), and gas (170.3%), while wireless communication devices (-1.7%) and passenger cars (-19.2%) decreased.

◆ Surge in Jeonse Prices and Stock Market Boom Increase 'Youth Debt' = Based on the ‘Financial Stability Report’ released by the Bank of Korea on the 24th, Asia Economy estimated that the household debt balance of the youth generation (ages 20-30) reached 485.79 trillion KRW. The rate of increase is also accelerating, rising from 398.55 trillion KRW at the end of 2019 before the COVID-19 pandemic to over 400 trillion KRW last year, and increasing by nearly 20 trillion KRW this year. The proportion of youth household debt in total household debt also reached a record high of 26.9% as of the second quarter. In particular, the youth household debt growth rate was 12.8% year-on-year, significantly exceeding the growth rate of other age groups (7.8%). In the first half of the year, youth accounted for 36.6% of apartment sales transactions in the Seoul metropolitan area. Among 7.23 million new accounts opened at major securities firms last year, youth accounts accounted for 3.92 million (54%).

This content was produced with the assistance of AI translation services.