So-called "recession spending" on cigarettes and lottery tickets increased last year as economic slowdown dampened consumer sentiment in South Korea.
According to data released Monday by the Korea Statistical Information Service (KOSIS), real monthly household consumption expenditure averaged 2.52 million won last year, down 0.4% from the previous year after adjusting for inflation. This marks the first decline in real consumption spending in five years since 2019.
Cigarettes and lottery tickets—classic recession-proof products—bucked the downward trend. Real cigarette spending reached 20,647 won per household, up 2.8% year-over-year. This represents the first increase since KOSIS began tracking the data in 2019. Analysts attribute the rise to higher smoking rates driven by economic distress.
Lottery spending also climbed as more consumers sought to hit the jackpot amid the downturn. Households spent 650 won monthly on lottery tickets, a 4.5% increase from the prior year. Persistent economic uncertainty and asset market volatility appear to have fueled demand for low-cost, high-reward bets.
Households with More Unmarried Children Bought More Lottery Tickets
Lottery purchases spiked notably in early last year when economic anxiety intensified following events including the December 3 martial law declaration. Data shows households with more unmarried children tended to spend more on lottery tickets.
In the first quarter of last year, households with two or more unmarried children spent an average of 708 won monthly on lottery tickets, according to KOSIS and financial industry data. This represented a 50.3% jump from the same period a year earlier and a 23.3% increase from the previous quarter.
By comparison, all households—including those with one or no unmarried children—spent an average of 700 won on lottery tickets in the first quarter, up just 2.2% year-over-year.
The trend persisted through the second and third quarters. Households with two or more unmarried children increased lottery spending by 30.6% and 12.4% year-over-year in the second and third quarters respectively, far outpacing overall household increases of 20.0% and 1.2% during those periods.
Lottery sales typically rise during economic downturns and periods of heightened uncertainty. Social turmoil, weakened consumer confidence, currency volatility, and a wave of small business closures in early last year likely made households with two or more unmarried children feel particularly vulnerable, analysts said.
Monthly household lottery spending stood at 457 won in 2019 before jumping to 560 won in 2020 during the COVID-19 pandemic. Spending continued climbing to 616 won in 2021, 612 won in 2022, and 620 won in 2023. After dipping to 587 won in 2024, spending resumed its upward trajectory last year.
Meanwhile, spending on insurance—a hedge against future risks—fell 4.3% to 60,963 won. Consumers also cut back on camping and sports equipment (-4.8%), travel (-1.6%), and accommodations (-4.5%). Hair salon spending dropped 1.2% to 30,170 won as consumers sought to trim grooming costs, while spending on home beauty devices surged 14.7% to 2,047 won.
