By Kim Yon-se
Staff Reporter

South Korea’s real gross national income (GNI), a key gauge of the country’s purchasing power, fell 0.9 percent from a quarter earlier, the first drop in two years, the Bank of Korea (BOK) said Firday.

The quarterly fall in the nation’s real income came as a result of a deterioration in the terms of external trade following the sharp rise in oil and other raw materials prices.

The figure is 1.3 percentage points lower than the 0.4 percent quarterly growth in gross domestic product (GDP) in the quarter.

This is the first time that the seasonally-adjusted GNI has contracted since the 1.5 percent fall in the first quarter of 2003.

``The gap between GDP and GNI figures reflect the wide disparity between economic data and what people feel about the economy. This also means that despite the growth in GDP, people’s purchasing power gained little in reality,’’ a BOK official said.

The real GNI inched up 0.5 percent year-on-year in the first quarter of 2005, the lowest growth rate since the fourth quarter of 1998 when the currency crisis was at its peak.

In comparison, GDP grew 2.7 percent year-on-year in the first quarter, which also shows that people gained little from the rise in GDP.

The nation’s total savings ratio recorded 30.0 percent in the first quarter, down 1.1 percentage point from a year earlier. Its total investment ratio also fell to 25.7 percent from 26.7 percent the previous year.

kys@koreatimes.co.kr